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Debt consolidation.

Q A I want to consolidate my debt. Could you give me names of some of the companies that are top ranked?

--L. Chaira

Los Angeles

I'm sure you've been dreaming about the day when you'll get only one statement each month instead of a stack of bills in your mailbox. However, you should proceed with caution.

If you have a very high debt load and a low credit score, you might not qualify for the best interest rates on a consolidation loan. Another drawback of debt consolidation is that it makes it appear as if you have less debt. Consequently, you might be tempted to spend more money, thus entering a cycle of overspending.

Consolidation can be risky, especially if you take out a home equity loan or line of credit to pay off your debts. Failure to keep up with payments could mean the loss of your home. I would recommend that you focus on managing your current debt rather than consolidating. With that said, Justin Pritchard, author of The Everything Improve Your Credit Book (Adams Media; $14.95), suggests, "When looking for a consolidation loan, tap into your existing bank and credit union relationships. Another option is peer-to-peer lending or a 0% credit card balance transfer offer." For more on consolidation, read "Risky Solutions to Debt Elimination" on BlackEnterprise.com.

Mail your consumer affairs questions to Ask Your Advocate, BLACK ENTERPRISE 130 Fifth Ave., New York, NY 10011 or send an e-mail to askyouradvocate@blackenterprise.com
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Title Annotation:ASK YOUR ADVOCATE
Author:McRae, Sheiresa
Publication:Black Enterprise
Article Type:Brief article
Geographic Code:1USA
Date:Nov 1, 2008
Words:249
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