Credit Debt Consolidation Services- Cutting Through the Maze

Thursday, June 11th, 2009 at 9:38 am

Credit Debt Consolidation Services

As if the currently weakened status of the global economy, which is affecting everyone to a greater or a lesser extent, is not enough of a challenge for us to deal with on a daily basis; we are suddenly required to learn a whole new language — the language of finance.

The fact of the matter is that being familiar with the language of finance is important under all circumstances and regardless of how well or poorly the economy is doing. Buåt during hard economic times such as those we are immersed in at the moment, understanding and speaking the language of finance is more important than ever. After all, how can we possibly make effective and informative financial decisions without understanding what the various options and strategies really mean?

In the article before you, I was commissioned to speak about Credit Debt Consolidation services and I intend to do it to the best of my ability. However, I fear that my best efforts may result in a meaningless mumbo jumbo of words unless they are first clearly and concisely defined. In other words, the language of finance demands a precise translation into common layman’s English.

I shall first define or, rather, translate each word separately and then I shall translate the entire phrase: Credit Debt Consolidation services.

Debt

When Entity “A” (an individual or a company) lends Entity “B” (an individual or a company) valuable resources such as cash or materials a debt is created until such time as Entity “B” has returned the valuable resources or has repaid them in their entirety.

Outstanding Debt

An outstanding debt is a debt which may have been partially repaid but not yet in its entirety.

Credit

When Entity “A” (an individual or a company) which is the lender and Entity “B” (an individual or a company) which is the borrower agree that Entity “B” will repay the debt at a later time or over a period of time, credit has been established. In essence, credit is one form of deferred payment and such transactions now make the lender a creditor and the borrower a debtor.

When credit is established, a set of terms are usually incorporated and Entity “B” (the borrower or the debtor) must agree to them. Such terms may include but are not limited to the following:

(a) The rate at which payments must be made regularly and the penalties that will apply if they are late in coming.

(b) The rate of interest (the percentage) which will be applied. This could be either a pre-set and fixed rate which means that it remains constant and unchanging such as is usual with credit cards. The rate of interest can also be variable and thus it can fluctuate up or down and those kinds of interest rates are often attached to property mortgages.

(d) The length of time in which the debt is expected to be paid back (Months? Years? Decades?).

Consolidation

Consolidation is the act of consolidating or unifying, combining, merging etc. of two or more units. This term is most frequently used in business arena where companies or account become consolidated to for a single larger company or account.

Debt Consolidation

Debt consolidation is the process of merging outstanding debt and thus resulting with a single loan to be repaid to a single entity and often at reduced rates of interest and more comfortable payment schedules.

Services

Services are sets of activities which are help, useful and/or required to individuals, to groups, to the public at large or companies and business and so on.

Credit Debt Consolidation Services

So, we finally get to the topic which I was commission to address. Credit Debt Consolidation Services are organizations comprised of professionals who have expertise in a variety of financial areas. Some of such organizations charge set fees for providing their services while others are nonprofits but they all provide financial counseling, education and advice as well as financial short-term and long-term planning. Credit debt consolidation services also provide referral services to other valuable resources as well as guiding consumers through the confusing and often painful process of debt management and debt consolidation.