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Perhaps you have seen ads for free debt consolidation services on the television. If you have a lot of credit card debt, you probably get these advertisements and offers in your mailbox on a weekly basis. Either way, you are probably wondering what free debt consolidation offers are all about. Debt consolidation is a financial management tool that allows you to roll all of your debts into one loan. You will then pay that debt off by paying one monthly bill instead of paying several separate monthly bills. The interest rate is typically lower than the interest rate on your credit cards. You usually can see an end to your debt when you use debt consolidation, as compared to credit cards that make you feel as though you will never escape from debt. Free debt consolidation offers are called free because they do not charge you a fee to set up your loan. The lender does make money off of your loan, but money is made through the interest that you are paying on the loan, rather than through origination or other upfront fees. Often simple counseling services are offered as part of free debt consolidation services. You can benefit from free debt consolidation services if you can find a loan that will save you money. You know that you will save money if the interest rate on the loan is less than the average amount of interest you are paying with your current credit cards. However, if you roll all of your credit card debt into a loan, and then continue to spend more and more on those cards, you will be worse shape after getting a free consolidation loan than you were before. In order to benefit from these services, you must stop spending money that you don't have and charging it on your credit cards.
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