Debt Consolidation in Illinois

Debt Consolidation in Illinois offers you the best mix of debt simplification and late fee elimination, along with permanent relief from creditor harassment. So, if you are an Illinois consumer with too many bills, a consolidation program could enable you to do away with your debt problems!

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How do Debt Consolidation Programs work in Illinois?

Illinois debt consolidation programs are simple. You merge all your unsecured high-cost debts into a single loan, simplifying your debt pay a single installment every month. In addition, the interest you pay on the consolidation loan lower than that of your existing unsecured debts combined.

How to consolidate your loans in Illinois?

Getting your loans consolidated here at Illinois is not difficult. All you need to decide is whether you want to do it by yourself or if you wish to seek help from a debt consolidation company in Illinois.

Consolidating your loans yourself

If you think you can manage your debts on your own, then you can take out a consolidation loan and use it to pay off your current debts.

Consolidation loans are available either as unsecured or secured loans. Unsecured loans don't require collateral, whereas secured loans do, such as a house, a car, or some other asset. While an un-collateralized loan means you to pay more interest, a collateralized loan usually gives you the benefit of a lower interest rate.

Secured consolidation loans include home equity loans, second mortgages, and similar lines of credit. Refinancing your mortgage or taking out a second mortgage are usually the best, primarily because of their low interest rates, which makes your payments smaller

Consolidating your debts with a consolidation loan can be a good option, as it does not involve the additional costs of a consolidation firm. However, the long period of the loan causes you to pay a lot of interest over time.

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Resort to a debt consolidation company

Consolidation plans offered by Better Business Bureau (BBB) accredited debt consolidation companies are another option for the debtors willing to get their multiple debts consolidated in Illinois.

There are many consolidation companies promising to resolve your debt problems. However, it is always advisable that you go with a company with BBB accreditation.

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When you register with a debt consolidation company, the company analyzes your financial situation, then suggests a suitable consolidation plan for you. Once the plan has been agreed on, a debt consolidation lawyer contacts your creditors and negotiates with them to reduce or eliminate interest and late fees. This plan is usually a long-term plan that makes your installment payments cheaper!

A good Illinois debt consolidation program helps you repay your debts within 6 years. All you have to do is pay an upfront charge to start the process, then pay a set amount to the company every month. This payment covers the company's fees and your monthly payment to your creditors.

So, you put your faith in a company, and you won't have the complication of managing many debts at one time. And once the program has been successfully completed, you'll end up saving quite a bit for yourself!

Loans that can be consolidated in Illinois

There are several kinds of loans which are ideally suited for debt consolidation in Illinois:

  • Credit card debts
  • Payday loans
  • Unsecured personal loans
  • Student loans

Effect of Debt Consolidation on your Credit Score

Repeated defaults on debt payments have a negative impact on your credit report. Consolidation programs in Illinois aim at fixing your credit rating over time.

It is true that going for a consolidation program would initially cause your credit score to go down. The dip would be a little more if you take out a consolidation loan, as it is yet another loan on top of existing debts.

However, your bad score would just be temporary!

As your existing debts start getting paid off during the consolidation process, your credit score goes up, and on successful completion of the consolidation program, you are left with an improved credit score.

Things you should avoid while in a Consolidation Program in Illinois

It is very important to keep the following things in mind when you enroll in a consolidation program:

  • Don't close your credit card accounts soon after you pay off the debts on those cards
  • Do not transfer balances, take out new credit card applications, or spend a lot.

Resorting to any one of the above while on a consolidation program may leave an adverse effect upon your credit report.

Benefits of Debt Consolidation in Illinois

A good debt consolidation program in Illinois would give you the following benefits:

  • Simplifying your debts: Debt consolidation enables you to combine most of your current bills into a single payment. This is a great way to get your debts and finances simplified.
  • Lower interest rates: Debt consolidation gets your repayment plan negotiated at a lower rate of interest. Lower rates make the overall monthly payments even easier and more affordable.
  • Tax-deductibility: The interest on a consolidation loan taken out on a first or second mortgage are tax-deductible from your federal taxes.(Note: Second mortgage amounts of $100,000 or more, are not tax-deductible)

Other Debt Relief options in Illinois

If you are looking for some other debt relief options in Illinois, then you can also choose to settle your debts or declare bankruptcy.

Related information

State Attorney General Phone Number: (312) 814-3000, (217) 782-1090, (618) 529-6400/6401
Public Service Commission Phone Number: (217) 782-7295; Toll Free: 1-800-524-0795

FTC Address:
Midwest Region Federal Trade Commission 55 West Monroe Street, Suite 1825 Chicago, IL 60603
FTC Toll Free:
877-FTC-HELP (382-4357)
FTC Website Url:
CFPB Toll Free:
CFPB E-mail:
CFPB Website Url:

Last Updated on: Tue, 22 Nov 2016

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