The good news is that selecting the right consolidation service is not as hard as it seems.

First you must realize that neither “non-profit” nor “Christian” is any indication on the quality of the consolidation program that they can offer. In fact, it’s easy to add misleading terms to your name in order to scam those of us who have gotten in over our heads financially.

Here’s what to look for.

#1 Do your research. Check around online. It is likely that you will find both recommendations and complaints for every company that you come across.

But use your good judgment, are the reviews from people who are just mad because they can’t get a loan to further spend themselves into trouble OR are their legitimate complaints about not being able to contact their representative, mix up in payments or other shady business dealings.

I would say that if more than 2 out of 10 complaints seem justifiably negative, stay away.

#2 Once you have found a couple that seem to match up with the goals you have in mind for getting out of debt, contact them. See who in responsive, who is helpful and who you would most prefer to deal with in the long run.

So that’s the way you can find the best company to consolidate with.

Chad

The truth is, a consolidation loan can be either one. This page is here to help you weed through the double talk and to find your way out of the credit frustration you have found yourself in.

So, what is a Christian consolidation loan, anyway?

Well, debt consolidation loans are loans that you get from a bank to pay off all of your current debts. So instead of paying several bills every single month, you only have one payment to make on all of the money you owe.

Debt consolidation loans for Christians (or not) can either be unsecured or secured. That simply means that if the loan is unsecured, you only have to give your word (and proof of income. If a consolidation loan is secured, then you have to have some collateral to guarantee the loan. In most cases this is your home or some other asset that ensures your repayment.

But, how do you know as a Christian, if you are a good candidate for a debt consolidation loan?

• Do you have several bills that you have to pay each month, usually with different due dates and amounts?
• Are you having a hard time staying up to date with all of your bills, causing you late fees and higher interest rates?
• Are you current interest rates higher than 8%-10%?
• Do you have equity in your home that you could use to simplify your life?

So, what do you need to get a Christian debt consolidation loan?

• You will have to show that your income will allow you to repay the loan. This may require that you provide a current budget that addresses all of your spending.
• Documentation showing that you own the collateral that you intend to use (unless you are applying for an unsecured debt consolidation loan).

So that’s what the bank will want from you, but what should you look for from the bank to ensure that your consolidation loan will do more good than harm?

• You must know all of the fees that will be charged in order to get the loan. Some companies are notorious to scam people in debt because they realize what a vulnerable situation it can be.
• Your interest rate is critical. Make sure you know what you are signing up for. With a secured loan, the rate will likely be less than with an unsecured debt loan, but only you can decide if that is okay for you. It may make more sense for you to pay a slightly higher rate in exchange for not having to tie the debt to your home.
• This one will seem obvious, but make sure that your monthly payment will be less for the new loan than for all the bills you are consolidating. Otherwise, you are wasting your time.

So, quickly before you run off and get a Christian debt consolidation loan at your local financial institution, do you want to know the potential downside of consolidation loans?

• While a debt consolidation loan allows you to pay smaller monthly payments, the loan period is typically much longer.
• With secured loans, you are linking the loan to something of value that you own. If you fail to repay the loan, you could loose your stuff.
• A consolidation loan does not stop you from spending money on your credit cards once they are paid off. It is completely possible that you could fill them right back up and have both a consolidation loan, as well as all you previous credit card bills coming to your house again.

So the real question is, can Christian debt consolidation loans really set you free from debt?

Yes!

But all the other good Christian money management guidelines still apply (and even more so) once you have consolidated your bills. Consolidation loans only solve your debt troubles if you stop spending more than you make.

And if you don’t stop spending?

You will discover yourself stuck in the debt trap that the consolidation loan was suppose to get you out of.

So be careful, pray and let God lead you concerning a consolidation loan.

Chad