How to Consolidate Debt

Video Transcript

"Hi, my name is Maria Enomoto from Consumer Credit Counseling Service and we are going to discuss how to consolidate your debt. Consolidation is basically taking all the debts that you have, and put it like in one packet and you pay only once a month. And, that one payment take care of every single debt that you may have. Now a person can work out your own consolidation by asking for a loan, a personal loan, or transfer some balances to one credit card that is going to offer a lower rate and a better payment. So, that's doing a consolidation because you can put like five accounts into one account and you are consolidating this five into this one and you only pay this one creditor. So, that's working on your own consolidation, that as I mentioned, can be like through a credit card, or through a personal loan with your bank. But, if this own consolidation doesn't work because your credit score doesn't allow you to apply for a really good credit that will lower the interest rate on your payments, then probably you can go to an agency, a non-profit agency basically, to have them work with you a consolidation program. This credit counseling agencies usually have agreements with major credit card companies to have a lower rate probably better than the one that you have and, to have a fixed payment and also a fixed rate that will allow you to pay the creditors in five years or less. So, that way you are going to be making only one payment to the company that you are going to be working with and, this company will pay all your creditors according to the plan and the list of creditors that you have on the plan. That's going to be like an external consolidation. So, to consolidate debt, two things. You can do it on your own with your own loan or you can do it through an agency, better if it is a non-profit agency, so that you are not going to pay that much in fees, and they can help you to consolidate your debt and pay this debt off."