"I'm not offended by all the dumb blonde jokes because I know I'm not dumb... and I also know that I'm not blonde."Dolly Parton
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Debt Consolidation and How to Overcome It
Debt is one of the major worry for many people. Many Americans are head to toes under debt and their numbers is on a rise. In such a scenario, debt consolidation has become a major escape route for everyone. People with multiple debts often use ...
Student Loan Refinance
This article provides useful, detailed information about Student Loan Refinance. There are basically two types of Student Loans: Federal Student Loans and private loans. Federal loans are based on the financial need of the applicant [student] ...
What Exactly Is Personal Debt Consolidation?
Personal debt consolidation doesn't mean handling the credit payments individually; rather, it means taking a personal debt consolidation loan to reduce your overbearing debt burden. Taking a personal loan for debt consolidation is a unique way ...
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Unfortunately, not all debt consolidation companies are legitimate. To avoid the shady companies, educate yourself on the debt consolidation process and watch out for these warning signs.
Quote Unusually Low Monthly Payments
A debt consolidation company works with creditors to lower your interest rates. Creditors have predetermined rates that they will lower to, so every debt consolidation program will get you the same rates. But since 2004, creditors no longer accept reduced minimum monthly payments.
Companies who quote unusually low monthly payments are probably giving you a low figure, which they will raise once you are in the program. Instead of comparing monthly payments, request information on their fees.
Demand All Debts Be Included
Companies who demand that all your debts be included in the debt consolidation don't have your best interests in mind. Some loans, such as credit union loans, are ineligible for lower interest rates. And other types of credit, like student loans, may already have a low interest rate.
However, by including all your bills in the monthly payment, the company can charge you a higher fee for handling more accounts. Before you enter a program, decide which accounts you want to consolidate for lower rates.
Charge High Upfront Fees
The most common scam is to charge high upfront fees, up to thousands of dollars, for services. Sometimes companies will promise to refund fees on completion of the program, but few clients actually complete the program.
Legitimate non-profit companies charge a flat monthly fee for each account handled. They are usually subsidized by financing companies. For profit companies will charge a competitive fee along with a flat monthly charge.
Offer Debt Settlement And Other Services
Be suspicious of those offering other services besides debt consolidation. Debt settlement, credit repair, and other programs are often just scams to take your money.
If you do need to make a debt settlement, you can save yourself money by doing this yourself. You may also find that declaring bankruptcy would be a better financial choice.
Request Account Numbers First
Be highly suspicious of any company that requests your account numbers, social security number, or other personal information before providing a quote. By providing this information, you open yourself up to identify theft.
To receive an accurate quote, simply provide creditors' names, balances, and interest rates.
About the author:
See my recommended Debt Consolidation Companies online. Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.
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The Pitfalls of Debt Consolidation LoansDailyFinanceExtending the debt to 15 years in a consolidation loan would knock down the monthly payment to $215, but it would increase the total interest payments to $18685 – a fact that is conveniently left out of most debt consolidation advertisements. |
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Bankruptcy vs. Debt ConsolidationEQuicknewsIf they werе smart abоut things, theу cоuld hаve usеd ѕоme оthеr option, likе debt consolidation. So whаt arе the implications of еach of thеѕе things? When it соmеs tо bankruptcy, the implications are quite severe. The bankruptcy will go оn yоur ... |
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How to apply for a debt consolidation loanThink MoneyIf you're thinking about applying for a debt consolidation loan, there are a number of steps you should take to ensure you're making the right decision and that you get a good deal. When you're consolidating debts like credit cards, overdrafts, ... |
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Debt Collections Booming Business, Consumers Look For HelpSeattle Post Intelligencer[8] If you owe multiple debts to the same collection agency, you can specify which account you want your funds to go to. The agency may have merged the debt together like a debt consolidation, but they are still separate. [9] In the event a collection ... |
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