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Consolidation loans are not always the best debt relief option

Faced with a mountain of debt, many Tennessee residents will do virtually anything to regain financial stability. Unfortunately, that leaves some wide open to falling victim to a debt relief scam. Any time there is a situation where people are in dire need of assistance, there are literally hundreds of unscrupulous people who are all too eager to take advantage of that situation. It is important to be able to distinguish between legitimate debt relief programs and scams that will relieve consumers of nothing but their hard-earned money.

For example, many companies claim to offer debt consolidation services that can help people gain control over their financial obligations. These services promise to provide consumers with a new loan that can be used to pay off older debts. The idea is that the new loan will have a lower interest rate than the existing debt, saving the consumer over the life of the loan.

In reality, however, many of these consolidation programs are aimed at benefiting the company rather than the consumer. There are often hidden fees associated with consolidation loans. Some borrowers are asked to put their homes up as collateral. It should also be noted that consumers always have the ability to contact their lenders directly and ask for better terms, which can have a greater impact than taking on a consolidation loan.

For those in Tennessee who are considering their debt relief options, it may be helpful to speak with a bankruptcy attorney in the early stages of the process. A brief consultation can help educate consumers on all available options and guide them toward a path that is right for their particular set of circumstances. That can make a world of difference in the eventual outcome, no matter which debt relief path is chosen.

Source:, "Be wary of methods offered to help you get out of debt", Mechele Agbayani Mills, March 24, 2017

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