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Debt Consolidation in Alabama

Debt consolidation offers a one stop solution to Alabama consumers burdened with unmanageable debts, poor credit scores, and repeated creditor harassment.With consolidation, you can replace all your existing debts with a single payment and simplify your obligations.

How much can you save?
Monthly payment you can afford
$
.00

How does Alabama debt consolidation work?

Debt consolidation works the same way in Alabama as in any other state. It allows you to combine your multiple debts into a single payment, which you pay off at a lower interest rate and over a longer period of time.

You can consolidate your debts either with a consolidation loan or you can enroll with an Alabama debt consolidation company, accredited by the Better Business Bureau.

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How does a debt consolidation company in Alabama work?

When you enroll with a debt consolidation company, the company will work on your debt issues in the following order:

  • First, the company will review your debt issues, your financial situation, and suggest the consolidation program best suited to you.
  • Once you enroll in the debt consolidation program, the company's debt consolidation attorney will notify your creditors to stop communicating with you and that your debt issues are being handled by the company.
  • Then the company's debt arbitrator will negotiate with your creditors to eliminate penalties and reduce interest on your debts. With negotiation, new low interest rates will be determined with each of your creditors.
  • The company will use the new interest rates and terms from the negotiation to devise a payment plan within your monthly budget. You will need to make a single monthly payment to the company as under this payment plan.
  • The company will use your monthly payments to disburse the installments to your creditors and this process will continue until all your creditors are paid off. Normally, the plan is designed so that most of your money goes into paying the principal and not the interest.

How can debt consolidation loans in Alabama help you?

If you want to consolidate your debts with a consolidation loan, then you will have to take out a low interest loan and use the funds to pay off your current debts.

Once you pay off your existing obligations, you will be left with only one debt towards the consolidation loan that you have borrowed. Low interest on the loan will lower your monthly payment towards the loan and also help you save money every month.

Types of Consolidation Loans

Consolidation loans can be secured or unsecured. Secured loans are borrowed against some collateral, while unsecured loans do not require any collateral.

If you have some asset such as house, car, landed property, or even jewelry, then you can use them as collateral for your secured loan. Normally, the use of collateral lowers the interest on the loan and increases the loan amount that you can borrow. So, secured loans are preferable as consolidation loans.

If you have considerable equity on your house, then you can consider a Home Equity Line of Credit. The more equity you have on your house, the lower the interest on the loan. Mortgage refinance is another good option that you can consider for consolidating your debts.

If do not have any assets, you can look for a low interest unsecured loan and get your existing debts consolidated.

Debts which are ideal for Alabama debt consolidation

If you are struggling hard to pay off the following obligations, then debt consolidation will be useful for you:

  • Credit Cards Debts
  • Private Student Loans
  • Personal Loans
  • Medical bills
  • Payday Loans

Don’t forget to check out the credit card debt laws prevailing in Alabama when you’re all set to consolidate your credit cards in Alabama. It will prevent from you falling prey to credit card debt consolidation scams and will also help you enjoy the benefits of debt consolidation.

How does debt consolidation in Alabama affect your credit score?

Debt consolidation causes minimal damage to your credit score because it helps you pay off your entire borrowed amount.

When you take out a consolidation loan to consolidate your debts, your score initially drops. But as you start paying off your existing debts, your score automatically rises. Later, when you pay off the consolidation loan, your credit score increases more.

What should you avoid when you’re in a debt consolidation program?

While you are in a debt consolidation program, it is very important for you to keep the following in mind, in order to prevent your credit score from getting damaged:

  • Do not close your credit card accounts soon after you have paid them off, as it affects your credit score negatively.
  • Do not take out any new loans, while you are in a consolidation program. It might harm your credit score.
  • Make timely payments, in order to boost your credit score.
  • Avoid balance-transfer. If you take out a new credit card in order to use the low introductory interest rate, you should make sure that you will be able to pay off the balance within the trial period. Otherwise, your interest rates will increase and hurt your credit score.
  • Avoid frequent applications for credit, while you are in a consolidation program. New credit will open up possibilities for new defaults and lower your credit score

Thus, debt consolidation program can be a great way to fix your bad credit score, if it is handled carefully.

What are the main benefits of Alabama debt consolidation?

  • You have to pay low interest rates on your debts.
  • You have to make single monthly payments.
  • You can defend yourself against debt collection abuse.
  • Your credit rating gradually improves with time.

Where can you consolidate debts in Alabama?

Well, you can consolidate debts anywhere in Alabama. Be it Birmingham or Huntsville, OVLG offers debt consolidation services everywhere. All you need to do is to call 800-530-OVLG as soon as you can. After noting down all the nitty-gritty details of your financial situation, the Financial Coach will suggest ways to consolidate debts online. .

How to know if you should consolidate debts in Alabama

A couple of signs can help you to determine if you should consolidate bills in Alabama. Some of them are as follows:

  1. You can’t afford to pay your monthly bills
  2. You’re falling behind your payments.
  3. Your debt load is increasing gradually due to late fees, penalties, and fines.
  4. You can’t manage multiple credit card bills, personal loans, payday loans, etc.

How to qualify for debt consolidation programs in Alabama

It’s not that difficult to qualify for Alabama debt consolidation programs. Almost anyone can qualify for these programs as long as they have a regular source of income. Once someone enrolls in a consolidation program, he has to pay the negotiated amount every month until his debts are eliminated. Even if the bill amount is only $1000 and the interest rate is 2%, then also he has to make monthly payments to the debt consolidation company.

The best way to determine one’s eligibility is to have a detailed discussion with the Financial Coach who can evaluate financial circumstances and make the best decision.

Why should you work with the best debt consolidation companies in Alabama?

The best debt consolidation companies in Alabama can help to fetch good repayment plans for you. They can help to bring a big drop in your interest rate, waive off late fees and penalties. Apart from that, they can educate you about your rights as a debtor so that collection agencies can’t take advantage of you financially..

The best debt consolidation companies in Alabama know all the FDCPA laws and the state laws to safeguard your consumer rights. They know the creditors’ strengths and weaknesses very well. As such, it becomes easier for them to negotiate and snatch the best deals for you.

The plus side of working with good debt consolidation companies in Alabama is that you can get legal advice and help from them if the situation demands. They can tell you how to avoid wage garnishment, bank account garnishment, and lien on properties.

Related information


State Attorney General Phone Number: (334) 242-7300
Public Service Commission Phone Number: 334-242-5218, (334) 242-5207

FTC Address:
Southeast Region Federal Trade Commission Suite 1500 225 Peachtree Street., NE Atlanta, GA 30303.
FTC Toll Free:
877-FTC-HELP (382-4357)
FTC Website Url:
CFPB Toll Free:
1-855-411-2372
CFPB E-mail:
info@consumerfinance.gov
whistleblower@consumerfinance.gov
CFPB Website Url:


Last Updated on: Tue, 3 Mar 2020