Home » Debt Relief Options » Louisiana »

Debt Consolidation in Louisiana

If you are a Louisiana resident with multiple debts and finding it hard to manage different principals with mixed interest rates, then you should consider debt consolidation to simplify your debt issues.

Debt consolidation is an easy debt management option where you merge your existing debts into a single debt, which you pay off at a fixed interest rate and over a longer period of time.

How does Louisiana debt consolidation work?

Debt Consolidation in Louisiana works the same way as in any other state in the US.

You can consolidate your debts in either of the following 2 ways:

  • You can use a debt consolidation loan, or
  • You can sign up with a debt consolidation company in Louisiana

How to consolidate debts with a consolidation loan in Louisiana?

If you are looking for a hassle-free way to consolidate your debts, then a consolidation loan can be the best possible way.

So, if you are willing to consolidate your existing debts with a consolidation loan, then you need to take out a low interest loan and use the money to pay off your existing obligations. Then, you will be left with just one obligation towards your consolidation loan, which you can pay off gradually. Low interest on the loan will simplify and reduce your monthly payments.

Types of Consolidation Loans

A consolidation loan can be a secured loan or an unsecured loan. Secured loans are borrowed against some collateral such a house, car, etc, while unsecured loans do not have any collateral provision.

Normally, the collateral provision reduces the interest on a secured loan and increases the loan amount. So, secured loans are preferable as consolidation loans.

If you possess assets such as house, car, or even jewelry, then you can take out a secured loan to consolidate your debts. A Home Equity Line of Credit is a great option to use as a consolidation loan. You can consider a HELOC if you have considerable equity in your house. The more equity you have in your house, the lower the interest and larger loan amount you can expect.

However, if you do not have any assets to use as collateral, then you can find a low interest unsecured loan.

How can a Louisiana debt consolidation company help you?

If you think you cannot manage your debt issues on your own, then you can sign up with a reputable debt consolidation/debt management company in Louisiana. But before you enroll, check the company's accreditation by the Better Business Bureau.

When you enroll with a debt consolidation company, the company will take care of your debt issues and work on them by:

  • First, the company will review your debt issues, your financial situation, and then suggest the consolidation program best suited for you.
  • Once you enroll in the debt consolidation program, the company's debt consolidation attorney will notify your creditors to stop all communications 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 lower interest rates will be determined for each of your creditors.
  • The company will apply the new interest rates and terms to devise a payment plan within your budget. You will be required to pay a single monthly amount to the company in accordance with the payment plan.
  • The company will use your monthly payments to disburse the installments of your creditors and this process will continue until all your creditors are paid off. Normally, the plan is arranged so that most of your money goes to paying the principal and not the interest.

Loans that are ideal for Louisiana 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

Whenever you consolidate your credit card debts, you should check out Louisiana's credit card debt laws in order to save yourself from falling prey to credit card debt consolidation scams and to enjoy the benefits of debt consolidation.

How does Louisiana Debt Consolidation affect your credit score?

Debt consolidation is possibly the safest debt relief option. It helps you pay down the entire amount of your obligations and causes minimal harm to your credit score.

When you take out a consolidation loan to consolidate your debts, your score initially drops, but that is temporary. As you start paying off your current debts, your score receives a steady boost. Later, when you pay off the consolidation loan, your credit score increases even more. Debt consolidation, thus, re-establishes a good credit report.

Things you should avoid while you are in a Louisiana debt consolidation program

Debt consolidation programs can be a great way to fix your bad credit score, if they are handled carefully. So, it is very important for you to keep the following in mind, while you are in a debt consolidation program:

  • Do not close your credit card accounts soon after you have paid them off, as it affects your credit score adversely.
  • Avoid taking out any new loans, while you are in a consolidation program. It might affect your credit score.
  • Make your payments on time, in order to raise your credit score.
  • Avoid balance-transfers. If you apply for a new credit card to use the low introductory interest rate, you should be sure that you will be able to pay the balance within the trial period. If you miss the trial period, your interest rates will increase and you get into debt trouble.
  • Avoid frequent applications for credit, while you are in a consolidation program. Applying for new credit every six months will only open up possibilities for new defaults.

Benefits of Louisiana Debt Consolidation

Louisiana debt consolidation offers you the following benefits:

  • You pay a fixed amount at a low interest rate.
  • You make a single monthly payment.
  • You get rid of creditor harassment.
  • Your credit ratings improve.

BBB-A--Rating