Get rid of debt with Debt Consolidation Services
Published by admin on May 31, 2010
Get rid of debt with Debt Consolidation Services
Debt consolidation services can provide a valuable service by lowering your interest rate that you have with your creditors, so you can pay your unsecured loans and bills in a shorter period of time. But there are companies that would rather take your money instead of helping you get out of debt. To avoid such scams, see the following tips.
Low Monthly Payment requests
While debt consolidation companies can lower your interest rate can lower your payments, they cannot negotiate lower minimum payments. Creditors no longer accept smaller payments since 2004, not even for those “hardship cases” so you must be aware of this.
One trick that some of the scam debt consolidation companies use to lure customers is promising a very low quote, only to jack the required payment in a month’s time. By the time you notice that there is something fishy about this debt consolidation service, you’ve already paid the fees, which are not refundable.
Upfront Fees
Another shady practice is to charge some large upfront fees, even when a company is claiming to have a non-profit status. Legitimate companies will either charge a small monthly fee between $14 to $69, this is going to be different depending on the number of accounts that you want to consolidate. The other fee structure is to charge a reasonable fee for each managed account typically for-profit companies use this structure.
If you are asked to pay thousands, especially with a bank check or money order, look for another program.
You should also be suspicious of companies that pressure you to use other applications, such as debt negotiation. Above all, debt negotiations or settlements usually will not improve your credit situation. In fact they are going to ruin your credit score. Secondly, you will collect high fees for something you can do on your own. And finally, companies that specialize in debt consolidation have no incentive to see you flounder with your finances, as opposed to those offering other services.
When you are looking for a debt consolidation program, ask questions about the program, fees, and the amount of time to repay your bills. Take advantage of the internet and research several different agencies.
Since debt and bill consolidation varies with the number of affected accounts, you should expect a phone consultation before you receive any quotes. With your quote, you should receive detailed answers, including pay off dates for each account and the exact charges. And if you’re feeling uncomfortable with the Agency, please go away. A hearing is not a commitment on your part.
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