Credit card for consolidating debt

Debt consolidation means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones.

In effect, multiple debts are combined into a single, larger piece of debt, usually with more favorable pay-off terms: a lower interest rate, lower monthly payment or both.

There are also several consolidation options available from the federal government for those with student loans.

Theoretically, any use of one form of financing to pay off other debts is practicing debt consolidation.

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There are two broad types of debt consolidation loans: secured and unsecured.(In circumstances where you need actual debt relief or don't qualify for loans, it may be best to look into a debt settlement rather than, or in conjunction with, a debt consolidation.Debt settlement aims to reduce your obligations rather than just reducing the number of creditors.Debt consolidation loan interest payments are most often tax deductible when home equity is involved.A consolidation loan may also be kind to your credit score down the road.

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