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Debt Consolidation Loans
Debt consolidation is promoted as offering people a positive way to reduce credit card debt, payday loans, and other debt and save money at the same time. The principle is to roll all your balances into one convenient personal loan. Your old credit cards and personal loans are closed, so you only have one monthly payment to think about for your new loan.
Get a FREE consultation with a debt specialist today.
For many people, the convenience of only having one personal loan payment each month is welcomed. It's much easier to remember when payments are due. You're also less likely to be past due with your accounts with a one monthly payment than you would with multiple due dates to remember each month.
Can a Debt Consolidation Loan Cost You More Than You Expect?
These loans sound like a great idea. They can work very well in some circumstances. In fact, they can be a good option for many people for home improvement, or to help pay for existing debt, especially if you have excellent credit and obtain a low-interest rate. You can take advantage of paying less interest on your debt balances each month.
For many people, these loans can lead to even more debt and interest payments.
Unfortunately, there are times when loans could put you in a worse position than you were in the beginning. If you're not careful, it could end up costing you more to pay off your debt than if you'd done nothing at all.
How Debt Consolidation Works
If you have multiple high interest debts and you are looking into a loan to pay them off, you must first find the loan amount you need.
This will take at least a good credit score in order to get the best terms. If you do not have a the minimum credit score requirement, you may not be able to qualify for a low interest loan.
Next you need to determine the minimum payments due on the loan. These need to be lower than what you are currently paying. This will allow you to either free up some cash or pay off the loan more quickly. Without a good credit score, the minimum payments can exceed your current monthly payments.
The key to choosing the right option for your situation is to understand the type of loan you're getting. It's also a good idea to work through some comparison calculations to be sure you're not paying more than you need to.
Learn more about debt consolidation companies.
Secured Debt Vs Unsecured Debt
Unsecured loans do not make use of any of your assets as collateral for your debt. For example, a credit card is unsecured, as you have access to credit without using your car or your home as security collateral. In the event that you can't make your repayments, the lender can't repossess your assets to repay your debt.
It's also worth noting that some unsecured personal loans can come with interest rates in excess of 20%. The high-interest charges could translate to increased monthly payment out of your pocket overall. If you are looking at credit card debt consolidation, check your credit card statements for the interest rates.
By comparison, secured loans require that you use an asset as collateral security for your debt. Your creditors also have access to your assets in the event of a default.

Secured loans, like home equity loans, are usually offered at a lower interest rate than their unsecured counterparts, making them seem more appealing. However, the really cheap interest rates are reserved for customers with excellent credit. If your credit score is impaired you may find you're paying a much higher interest rate than you expected, even with a secured loan.
Comparing Your Debt Relief Options
The easiest way to know whether a debt consolidation loan is right for your individual financial situation is to compare the total costs. There are plenty of good loan comparison calculators available online that let you input your loan details like debt balances, interest rates and any other associated fees .
For example, let's assume you have a total of $22,000 in unsecured debts like credit card debt, store cards, student loans, and personal loans you want to consolidate. Your current minimum payments add up to $516. However, keep in mind that you're only paying the minimum amounts due.
Now let's look at what happens if you apply for an unsecured loan. If the lender charges you 17% interest over a loan term of 5 years, your repayments will be $547 per month.
You end up paying more money out of your pocket each month just to cover your repayments. However, each payment you make actively reduces your unsecured debt levels, so you can be debt-free in 5 years. If you're already struggling to repay your debt balances, paying more money each month could put a drain on your budget, even if you managed to get a loan with the lowest rate.
Of course, there’s also the total cost to consider. At repayments of $547 per month over a term of 5 years, the total amount you’ll repay to the lender is $32,805. That’s $10,805 more than the original amount you borrowed.
| Debt Type | Current Balance | Minimum Monthly Payment |
|---|---|---|
| Credit Card 1 | $5,000 | $150 |
| Credit Card 2 | $2,000 | $60 |
| Store Card | $1,000 | $30 |
| Car Loan | $10,000 | $156 |
| Student Loan | $4,000 | $120 |
| Totals | $22,000 | $516 |
"That’s $10,805 more than the original amount you borrowed."
| Amount Borrowed |
Rate | New Payment | 5 Year Term | Total Cost |
|---|---|---|---|---|
| $22,000 | 17% | $547 | 60 | $32,805 |
Consumer Credit Counseling
The first debt solution is consumer credit counseling. This means that you meet with a credit counselor who helps you understand basic finances including budgeting. They may also help you set up a debt management plan.
Debt Management Plans
debt management program is a way to roll all your payday loans and other unsecured debt into one payment. It is not a way to consolidate debt as there is no loan and it is not settlement because you still pay the full amount and full interest.
The monthly payments can be as high, or higher, than the minimum payments a consumer was paying prior to enrollment with the consumer credit counselor.
If you are just starting to get into debt, debt management plans may be your best option.
Debt Settlement
The last option is debt settlement. In a debt settlement program, the debt settlement company negotiates with creditors and debt collectors to lower the interest rate and the total amount owed. Many banks, financial institutions, and lenders will happily enter a settlement agreement for a reduced unsecured debt balance in the hopes of getting some of their money back from you.
Most debt settlement companies deal only in unsecured debt like credit card debt, medical bills, and personal loans. While debt settlement is not for everyone, it can drastically turn around your financial situation.
Pacific Debt is a accredited debt settlement company that has settled over $500 million in debt since 2002. If you are eligible for our debt relief solution and follow through with the requirements, you can expect to be debt free within two to four years.
How Debt Settlement Works
Your assigned Pacific Debt certified debt counselor then begin negotiating with your creditors to lower interest and total debt. You make regular payments, based on your budget, to a dedicated bank account. After you build up enough savings, Pacific Debt pays off each creditor.
We do not charge upfront fees (avoid any debt settlement company that charges upfront fees!). We do charge a fee of 15-25% of the total debt enrolled as we achieve results.
During your time with Pacific Debt, you will receive personal attention from your personal account manager and certified debt specialist. In fact, our customer service is legend and we are regularly named as Number One for Customer Service.
Debt Settlement Concerns
Before enrolling in debt settlement, understand the risks. First, you may need to stop paying bills to convince creditors that you are serious. As a result, your credit report can take some damage. Second, the IRS sees debt forgiveness as income and you may receive some tax liabilities. Speak with a qualified tax advisor for more information.
Before you agree to any loans or offers, take the time to discuss your financial situation with a debt settlement specialist. You could reduce your monthly loan payments, making your budget easier to manage.
You could also end up repaying far less than you thought, but the only real way to know is to compare your options accurately before you make a decision. A debt settlement program can take 24 - 48 months to complete but when you are all finished, you could become debt-free.
Before you make any decisions, you should check out our debt relief program and see if you qualify for our debt settlement plan. It could be the perfect debt relief option you've been waiting for!
Pacific Debt Relief
Pacific Debt Relief is an accredited debt settlement company that had been in business since 2002. Formerly known as Pacific Debt, Inc, we are leaders among national debt relief companies.
Pacific Debt focuses on making certain that you understand all available debt relief services so that you can find the best debt relief for your unique financial situation.
Pacific Debt Relief Accreditation
Pacific Debt Relief is an accredited debt settlement company. We are accredited by:
- Accredited member of the Consumer Debt Relief Initiative
- International Association of Professional Debt Arbitrators
- Better Business Bureau
Like all debt relief companies, Pacific Debt Relief is under the oversight of the Federal Trade Commission. Pacific Debt has settled over $500 million in debt since 2002.
Pacific Debt Eligibility
To be eligible for the Pacific Debt Relief program, you must:
- Enrolled debt of at least $10,000 in unsecured debts (credit card debt, payday loans, personal loans, previous consolidation loans, medical bills, collections and repossessions, business debts, and some student loans). Can be from multiple debts.
- Difficulties making payments and late fees.
- We offer national debt relief, but you must live in a state where Pacific Debt operates. Pacific Debt offers services in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Missouri, Mississippi, Montana, North Carolina, Nebraska, Nevada, New Mexico, New York, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, Virginia, Wisconsin
- * Since not all states are included, not all clients can enroll in our company. People in other states can be connected to one of our trusted debt relief companies
Call one of our certified debt specialists for a free consultation!
*Disclaimer: Pacific Debt Relief explicitly states that it is not a credit repair organization, and its program does not aim to improve individuals' credit scores. The information provided here is intended solely for educational purposes, aiding consumers in making informed decisions regarding credit and debt matters. The content does not constitute legal or financial advice. Pacific Debt Relief strongly advises individuals to seek the counsel of qualified professionals before undertaking any legal or financial actions.
Pacific Debt Relief
750 B Street Suite 1700
San Diego, CA 92101
Hours of Operation
Mon-Thurs: 6am - 7pm PST
Friday: 6am - 4:30pm PST
Saturday: 7:30am - 4:30pm PST
Clients
Phone: (877) 722-3328
Fax: (619) 238-6709
Email: cs@pacificdebt.com
Non-Clients
Phone:
Fax: (619) 238-6709
Email: inquiries@pacificdebt.com
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*We do not discriminate on the basis of race, color, religion, sex, marital status, national origin or ancestry.
*Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes.
*Your visit to our website may be monitored and recorded from essential 3rd party scripts.
*Clients who make all their monthly program deposits pay approximately 50% of their enrolled balance before fees, or 65% to 85% including fees, over 24 to 48 months (some programs lengths can go higher). Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific circumstances. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Pacific Debt is not a credit repair firm nor do we offer credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S. 12-03825.