4 Military Debt Consolidation Myths You Must Know
Posted on January 3, 2011
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Military debt consolidation loans and programs offers financial help to the service members in the military when they struggle to make their monthly payments on their unsecured loans. Debt consolidation helps military members pay off their loans in affordable monthly payments, avoid bankruptcy and achieve their financial goals. There are many misconceptions that people may have acquired about military debt consolidation services. While it’s important for you to seek debt consolidation help and reduce your debts, it is equally important for you to know the myths associated with consolidating your debts. Have a look at some of the myths and truths about military debt consolidation.
* Military debt consolidation companies are military agencies
One of the biggest myths believed by military people is that the debt consolidation agencies are military companies and not normal ones. But the truth is that the debt consolidation agencies that serve the service people are nothing but normal debt consolidation agencies that also help the consumers who are not in the military.
* Debt consolidation does not need any kind of security
If you want to seek the help of a debt consolidation company, you need some kind of security. Most military servicemen believe that they can seek debt consolidation without even having any kind of security. But the fact is that as you seek debt consolidation by refinancing your home loan or by taking out a home equity loan, you’ll have to keep collateral that will act as a security in case you defend the lender. If you default on the payments, the lender may foreclose your valuable property.
* Credit counselors can reduce your payment by half
The next military debt consolidation myth that is believed by most servicemen is that credit counselors may reduce your debt amount by its half. The truth is that no credit counselor can ever reduce your principal debt amount by half. It’s just that they may refer you to a debt consolidation or a debt management program where the debt consultants may attempt to reduce the monthly payments by lowering the interest rates. Only debt settlement can lower the principal amount but this highly affects your credit score and must be avoided.
* Filing bankruptcy is not a big deal
There are many service men who are led into believing that filing bankruptcy is not a big deal. There are thousands of people who are filing bankruptcy every month and then are restoring their finances. But the fact is that filing bankruptcy should be the last resort for all consumers because this stays on your credit report for the next seven years and makes you highly unworthy for obtaining new lines of credit.
Therefore, if you’re working in the military and you’ve incurred huge amount of unsecured debts, then debt consolidation might be the best option for you. There are many ways of consolidating your unsecured debts. Get to know each kind and consolidate in the best way possible so that you can profit while reducing your debts.
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