Debt Consolidation in Tennessee

Are you a Tennessee resident, with too many debts? Is the monthly interest on your debts reducing all your chances of saving for the future? If you are looking for an effective way out of your unmanageable debts, then debt consolidation is just what you are looking for!

Debt management is a great way to simplify your finances. It restructures your debts and provides a payment plan that can save you quite a bit on your long-term debts like credit cards, mortgages, and other loans.

How much can you save?
Monthly payment you can afford

How does debt consolidation work in Tennessee?

Debt consolidation in Tennessee works the same way as in any other state. It is a debt management option that helps you combine all your debts into a single payment that you pay off at a lower interest rate over a longer period of time.

You can consolidate your debts either with a consolidation loan, or you can enroll with a BBB accredited debt consolidation company in Tennessee to get your consolidation done.

If you choose to use a consolidation loan, then you should take out a low or zero interest loan and use it to pay off your existing liabilities. Once you pay these off, you will be left with a single debt towards the consolidation loan. And since your consolidation loan carries a low interest rate, it reduces the amount you pay each month, and saves you money every month.

If you have assets like a house or car, then a secured loan is preferable as a consolidation loan. Secured loans are loans that you take out against some asset (like a house, a car, jewelry, etc) that is used collateral for the loan. Collateral reduces the interest on your loan and increases the amount you can borrow.

If you have substantial equity on your house, then you can use a Home Equity Line of Credit (HELOC) as a consolidation loan. The more equity you have in your house, the lower the interest rate on your loan.

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How does a Tennessee debt consolidation company help?

When you sign up with a debt consolidation company, the company takes up your debt issues and works on them by:

  • Assessing your debt issues and financial position.
  • The company's debt consolidation attorney will then notify your creditors to stop all communication with you and that your debt issues are being handled by the company.
  • Then the lawyer will start negotiating with your creditors to eliminate your late fees and reduce the interest rates on your accounts. The negotiation will determine new interest rates for each and every creditor.
  • Then the company will apply these new interest rates to devise a consolidated payment program to suit your monthly budget. The program will require you to pay a single monthly amount fixed by the company. It will be determined so that most of the money you pay is used to repay the principal and not the interest. From your monthly payments, the company will distribute the monthly installments of your individual creditors. The payment process will continue till you have paid off all your creditors.

Debts eligible for Consolidation

If you are struggling with the following debts, then debt consolidation is the right option for you:
  • Credit Cards Debts
  • Student Loans
  • Personal Loans
  • Medical bills
  • Payday Loans
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It is important to check out the credit card debt laws in Tennessee, whenever you decide to consolidate your credit card debts. Knowledge of these laws will not only prevent from you falling prey to credit card debt consolidation scams, but will also enable you to enjoy the advantages of credit card debt consolidation.

How debt consolidation affects your credit score?

Debt consolidation is possibly the best debt relief option, as far as the credit score improvement is concerned, since with consolidation you pay off the total principal amount, it causes minimal injury to your credit score.

A consolidation loan lowers your already low your credit score. But that is temporary. As your several defaulted accounts get paid off, your credit score shoots up. Gradually your score regains a good shape , as you pay off your consolidation loan over time.

The case is almost the same when you get your loans consolidated through a debt consolidation company. As your debts get paid off, your credit score bounces back.

However, you should to stick to the following, while you are in a debt consolidation program:

  • Do not close your credit card accounts soon after you have paid them off, as it impacts your credit score negatively.
  • Avoid taking out any new loans, while on a consolidation program, as it can lower your score.
  • Make timely payments. Timely payments improve your credit score fast.
  • Avoid balance-transfer, especially if you apply for a new credit card in order to use its low teaser rate. If you fail to pay off within the trial period, your interest rates will return to normal, and that can hurt your credit score.
  • Avoid frequent application for credit, while on a consolidation plan. Applying for new credit every six months could open up possibilities for new defaults.

Handled carefully, debt consolidation can be an excellent means to fix your bad credit score. But a little carelessness and you might end up ruining your credit score!

Benefits of Tennessee Debt Consolidation

Debt Consolidation in Tennessee benefits you:

  • Single monthly payment
  • Lower interest rate on your payment.
  • Consolidation loans are tax deductible
  • Freedom from creditor harassment.
  • Improved credit ratings

Related information

State Attorney General Phone Number: 615-741-4737, 615-741-1671; Toll Free: 1-800-342-8385
Public Service Commission Phone Number: (615) 741-2904

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:
CFPB E-mail:
CFPB Website Url:

Last Updated on: Mon, 19 Dec 2016


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