How many times have you seen that commercial on television or heard it on the radio while you were sitting in rush hour traffic on the interstate? Bad credit is big business for an ever increasing number of companies across the United States and while they promise you the world, you should know exactly what they can and can not do before signing on the dotted line.
The prevailing majority of bad credit debt consolidation companies are profit making organizations and as such they are "in it for the money". Here's a quick rundown of how they operate:
1. The debt consolidation counselor evaluates your existing financial situation including your credit history, existing debt and even your income.
2. When you enter into an agreement with the company, they will begin speaking with your creditors directly on your behalf, explaining who they are and working with them to lower your interest rates and stop penalties for past due balances and late payments.
3. You will send a monthly payment to your debt consolidation company who in turn will pay each of the creditors.
NOTE: You will still receive your monthly credit card statements, and you should always check them carefully to ensure that your debt consolidators are paying them the right amount and that no additional fees are being accrued. How does the bad credit debt consolidation agency get paid? In most cases a percentage of your monthly payment is taken off the top as the agency's fee. This fee will vary depending on the company you work with, but it can be as much as ten percent (10%) or more.
Do I Have A Choice?
It is easy to feel helpless and defeated when the bills start to pile up and you just can't see the light at the end of the proverbial financial tunnel. Even if your situation makes you feel as though using a debt consolidation agency is your only option, let me assure you that you do have a choice, no matter what a salesperson may tell you to the contrary.
There are non profit credit counseling agencies whose sole purpose is to help people who are having money issues. In some ways they work much the same as a for profit debt consolidation company but with a few major differences. A non profit counseling agency will evaluate your overall financial picture and offer suggestions for ways to improve the situation. They will help you to understand how you got in to the position you are in and then assist you with creating a budget that you can live with. In some cases they might suggest ways for you to reduce your monthly expenses. For example, my credit counselor years ago suggested that I purchase a $12 coffee maker instead of spending two or three dollars a day on coffee during the course of a day. She showed me how at that rate I would pay for the coffee maker in the first week, and have an extra $45 at the end of the month. At times they may refer you to resources in your community that may be able to help.
The final decision is yours to make, but be sure to avail yourself of all of the information before you choose.
So how can you go about finding the right debt consolidation company for you? Here are some important tips to help you with your journey to find the right company for you.
The best part, of course, about a non profit debt consolidation company, is that they don't make any profit from your debt consolidation. Therefore, they won't have any competing interests with you.
First of all, a nonprofit debt consolidation company is simply one that takes out all of your different debts and combines them into one, and will keep track of paying off your creditors for you. This task is the same as a for profit debt consolidation loan company; the only difference is that non profits don't make money from it. Of course, there are more than simply nonprofit debt consolidation companies from which you can choose from.
While nonprofit companies certainly have their advantages, you don't want to limit your choices to them, or you may miss out on a good deal. Check the Internet and other sources to find out which company would be best for you.
The Internet has an abundance of information on to just about any topic you want at the click of a button, and debt consolidation is no exception. Simply, find out which debt consolidation loan company has the lowest interest rate for your specific situation, give them a call, and while doing so, evaluate their customer service.
Their customer service might even be more important than the price you pay, because without this, dealing with them will be a very frustrating event. Also, evaluate the other services they offer, such as debt counseling; often times, these debt consolidation companies will counsel you as to how to break free from your debt and get on the road to financial freedom.
Therefore, their additional services are another important consideration to take into account before you opt to go with any company. Ask any friends or family members you know of who've used the company about their customer service and other services they offer, and also read reviews of current and past customers on the internet. This way, you can get a good idea for how well a company treats it's customers before shelling out the money beforehand.
Of course, the lowest interest rate will not be the only or even the best company to choose from, but it's a great starting point. One more important piece of advice; as much as possible, try not to focus on getting out of debt, but ultimately on achieving financial freedom. Keep focusing on what your life would be like if you were financially free, and this will motivate you to make it happen.
Write down your goals and put them in an area you can see them often. Follow these important tips, and whether or not you choose to go to non profit debt consolidation loan company or not, you'll find the right one for you.
Both Bruce7098 & Shawn Mitchell are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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