Debt Consolidation in Michigan

If you are a Michigan resident behind on your bills and debt repayments, choosing a debt consolidation program can lessen your worries!

Debt consolidation programs in Michigan ensure easy repayment schemes for the debtors, grumbling over multiple payments. They allow you to merge your multiple debts into a single affordable monthly payment. You may either get your debts consolidated by yourself or seek professional support from a BBB accredited debt consolidation company.

How much can you save?
Monthly payment you can afford

Role of Debt Consolidation Companies in Michigan

Michigan Debt Consolidation companies accredited by the Better Business Bureau (BBB) offer many consolidation options to suit your needs. You may consolidate your debts by applying for a consolidation loan or by choosing a consolidation program. There are debt consolidation lawyers associated with these firms, who take care of the legality of the entire procedure and offer the required advice to their clients.

Once you are registered with a consolidation company, their representatives would review your financial situation, talk to your creditors, and devise a suitable repayment plan to simplify your repayments.

These companies create a long term consolidation strategy to that combines and lowers the client’s monthly payment into one payment to the consolidation company. Thereafter, the company will disburse the payment among your individual creditors.

Efficient negotiation by the debt consolidation companies also help get rid of penalty charges such as over-limit costs and late-fees, that have accrued due to your defaults.

In addition, the debt consolidation companies in Michigan ensure their clients do not receive harassing collection calls, while in a consolidation plan.

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Getting a Debt Consolidation loan in Michigan

In order to get a Debt Consolidation loan, you should have a good credit rating. However, some lenders offer debt consolidation loans to debtors with a bad credit rating if you have collateral. The higher the value of your collateral, the lower your interest rate will be. Having collateral also gives you more of a choice when finding a reputable lender to make a debt consolidation loan.

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Types of consolidation loans available in Michigan

Michigan offers a wide range of loans to consolidate debt. The following are the three most popular kinds of consolidation loans available:

  • Simple Signature Loans: These are ideally available to debtors with a fairly good credit score. No collateral is required.
  • Collateral Loans:These are typically for those with a credit score too low for a signature loan. As the name suggests, this type of loan requires collateral to protect the lender in case you default.
  • Second Mortgage Loan:These types of loans are offered by mortgage lenders, who offer you another mortgage on your home in exchange for the money you need to repay your debts. If your first mortgage payments have been timely, you are eligible for a second mortgage.

Effects of Debt Consolidation on your Credit Score

Debt Consolidation has a direct effect on your credit score. Therefore you should be aware of the possible effects on your credit score before you embark on a consolidation program.

A consolidation loan will affect your credit record in the following ways:

  • As you use the consolidation loan to pay off previous debts, your previous accounts are reported as paid off. And this in turn, boosts your credit score.
  • It is advisable not to close your credit card accounts soon after you have paid them off, as it hurts your credit score adversely. If you are badly tempted to close your accounts, you may close most of your accounts, but take care to keep your oldest one intact. Closing accounts can add negative impact on your credit score initially, but it eventually bounces back with time.
  • Debt consolidation causes you to take out another loan. This loan will affect your credit score accordingly. When you take it out, your score initially dips, but it rises as you keep on making your payments timely. However, it is advised not to take out any new loans, while on a consolidation program, as it may lower your score.
  • A debt consolidation loan usually makes room for on-time payments by simplifying your debts. And on-time payments are excellent when it comes to giving a hike to your credit score.

Aim of Debt Consolidation Programs in Michigan

Debt consolidation programs in Michigan primarily focus on simplifying your debts through an easy and affordable repayment plan. They also have some clear cut aims that essentially help the Michigan debtors take the right step towards a debt free life:

  • Ensuring lower monthly payments: By consolidating your loans, you actually make arrangements for a monthly payment that is within your means.
  • You to pay less towards the interest: Consolidation programs cause you to dedicate more of your money towards reducing your debt and not the interest.
  • Assures a boost in your credit rating: Debt consolidation plans ensure that your debts get paid on time. And this in turn, actually improves your credit rating.

Certain things that you should avoid while on a consolidation program.

  • Closing all of your credit card accounts soon after starting with a consolidation plan.
  • Closing your oldest accounts
  • Using balance transfers to encourage debt negotiation
  • Frequent application for credit cards
  • Spending beyond your means

Alternatives to consolidation in Michigan

If you think that consolidation programs are not for you, then you may want to consider a debt negotiation plan. Debt negotiation plans reduce the amount of money you owe by getting your creditors to agree to a settlement.

If you think your finances do not look bright for carrying out a negotiation, filing for bankruptcy may be able to give you the fresh start you are looking for!

Related information

State Attorney General Phone Number: (517) 373-1140; Toll Free: (877) 765-8388
Public Service Commission Phone Number: (517) 334-6445, (517) 241-6180

FTC Address:
East Central Region Federal Trade Commission 1111 Superior Avenue, Suite 200 Cleveland, OH 44114-2507
FTC Toll Free:
877-FTC-HELP (382-4357)
FTC Website Url:
CFPB Toll Free:
CFPB E-mail:
CFPB Website Url:

Last Updated on: Thu, 15 Dec 2016

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