A debt consolidation program is a formal agreement between the debtor (you) and the creditor(s). Debt consolidation programs are designed to consolidate and manage your debt into one program. It helps reduce outstanding debts at a reduced payment level over a span of time. Each program is tailored around the individual’s financial situation. To gain a better understanding of which plan works best for a debtor an analyst reviews your income and monthly expenses.
Debt consolidation is particularly helpful if you are able to borrow money at a low rate of interest to repay a loan at a higher interest rate. This can also result in a faster repayment of your debt.