Debt consolidating counseling
You usually work with a debt-relief organization or credit-counseling service.These organizations do not make actual loans; instead, they try to renegotiate the borrower’s current debts with creditors.
Even if the monthly payment stays the same, you can still come out ahead by streamlining your loans.
If your consolidation loan is secured with an asset, however, you may qualify for a tax deduction.
Debt consolidation loan interest payments are often tax-deductible when home equity is involved.
However, there are specific instruments called debt consolidation loans, offered by creditors as part of a payment plan to borrowers who have difficulty in managing the number or size of their outstanding debts.
Creditors are willing to do this for several reasons, including that it maximizes the likelihood of collecting from a debtor.