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What To Look For In Credit And Debt Consolidation Programs

When debt accumulates across several accounts, it can often become difficult or even impossible to keep track of, and that means your debt is going to continue to grow. Each credit account has a different interest rate, due date, and fee structure, leaving you very confused once you've got a few accounts going at the same time. Enter the advantages of debt consolidation. In this type of arrangement, your debt consolidation company helps you to restructure your debt, leaving you with one monthly payment and one interest rate. It makes things a lot less confusing, and sometimes that can make the difference in getting your debts paid off.

There are two primary ways to enter into debt consolidation. First, you can take out a brand new loan that covers all of your debts across multiple lenders. You then use that single loan to repay all of your debts, and then you're left paying off the one debt consolidation loan with a single interest rate. The second way to enter into this arrangement is to work with a third-party debt consolidation company who will repay all your debts and give you a single payment with single interest rate once your other debts are paid off. One is more of a do-it-yourself fix while the other requires you to repay a final lender who is there specifically to help you get your finances in order. Many people prefer to work with a debt consolidation company because they are staffed with financial professionals who help you get your financial life back on track as well as repay your debts.

Signs of a Good Debt Consolidation Program

Before you sign on with a credit and debt consolidation company, make sure that they pass a few general tests. First off, they should have a good rating with the Better Business Bureau. Customers should have, on average, positive things to say about them, and they shouldn't have many complaints. Here are a few other things to look for.

Industry Member

If the company you're looking at is reputable, they might be registered with one of the many agencies associated with this industry. One agency to check for registration is the National Foundation of Credit Counseling. If your company is registered here, it's a good sign that they're going to help you and be reputable at what they do. Keep in mind that even if they're not registered here, it doesn't mean they might not be the right company for you.

Good Communication

Your potential debt consolidation company should definitely respond when you reach out to them, but they should not violate the manners of good communication. In other words, they shouldn't be predatory about seeking your business. When you contact them, they should clearly and accurately answer all of your questions and be welcome to your business, but they should not be calling you at all hours of the day or night or pressuring you into entering debt relief agreements before you're comfortable or ready. Look for this red flag before signing on with a company. It could be a sign that they're a scam or that they're just bad at what they do!

Many Options

There is more than one way to consolidate debt. Debt settlement and debt management are two other ways to take care of your debts that your debt consolidation company should be familiar with and be welcome to discussing with you. The great thing about a good consolidation company is that they want to do what's best for you from a financial standpoint, and that may mean offering you additional debt counseling to help you know what is best for you to do in your situation. There are many ways to approach debt, and a good consolidation program is going to know the ways to approach your specific situation.

Good Rates

Don't just go for the first company you stumble upon. If you're doing a third-party debt consolidation where you'll directly pay back the company itself, make sure that you get a few quotes before signing on the dotted line. You definitely don't want to get stuck with sky high interest rates that are going to keep you in debt just as long as your original creditors would have.

If you follow these few simple signposts, you should lead yourself directly to the doorstep of a good debt consolidation company. They're out there. You just have to look for them.