Consolidating car and student loans
Individuals, and families in particular, often have multiple vehicles and car loans.
Consolidating allows you to lump all of these loans together into a single loan.
The amount of debt you transfer also may be capped by your credit limit.
The potential upside with this option is you could pay down your debt without paying any interest.
A DMP is not a loan, and Bovee warns that there is "not a lot of wiggle room" in a credit counseling company's plan for you, which typically last up to five years. If you miss one, you could end up back where you started with high interest rates.
You also have to be careful not to fall back into old habits. Close your newest cards, Bovee says, and be careful with your future credit spending.
Keeping up with car payments can be a challenge if you have taken out multiple loans.
By consolidating your loans, you are forfeiting the privileges and terms of the initial loan and agreeing to the terms of the new loan.
Car loans are an ideal type of debt to consolidate.