Debt Consolidation FAQs

Common Debt Questions

Debt consolidation research contains many words that are typically not used in every day scenarios.  For this reason, you may not be completely accustomed to hearing them and may be unsure of what they mean.  You do not want to go through with a debt consolidation plan without understanding all of the terms present in the contract.  Knowing and understanding the contract’s vocabulary could save you from choosing a plan that you do not want.

Debt Settlement

The term debt consolidation settlement refers to the actual plan in which you decide to choose.  Once you have picked out a debt consolidation plan and done the correct paperwork for it, including signing a contract, you have come to an agreement, or what debt consolidation companies call a settlement.  This settlement tells you how much the plan will cost you as well as the monthly payments and how long you will be paying of the plan for.

Balance

You have probably heard this term used before, but when it is referring to debt consolidation plans, the word balance is used to mean the amount of money you owe after all of the bills you have paid have been calculated. Therefore, if you are in the middle of the process of paying back your debt, the balance would be the amount of money you still have left to pay.  A balance could also mean the total cost of your debt consolidation loan after all of the fees and interest rates are calculated into the consolidation plan.

Amortization

Amortization is a word that gets tossed around quite a bit when it comes to debt consolidation research and plans.  Amortization is referring to the entire payment plan when you are using a company to help pay off the debts you have.  It includes the payments you are making as well as the interest payments you have made.  Thus, once you have finished paying back your loan, it can be considered an amortization. 

If you have any more questions check out our debt consolidation FAQ page.