We’ve talked before on WSL about debt consolidation and the pros and cons associated. While there are a number of types of debt consolidation, the point of today’s article is to help you determine the best debt consolidation program for your situation.
Personally, I used a consolidation program where a company negotiated new monthly payments and interest rates with each of my creditors (on my behalf). After negotiating more reasonable terms with my creditors, I then paid the debt consolidation program a single monthly payment in which they disbursed between the 4 or 5 creditors I had at the time. While debt consolidation is not the best solution for everybody, it helped me when I was in a bind and may be an option for you – especially if you have large amounts of credit card debt or are behind on your payments.
The first and most important thing is to know what you need help with. There are many types of debts and the best program depends on several things including the nature of debt and your needs. If you have high interest credit card, personal loan, or medical debt, then a debt consolidation program may be just what you need to get over any current financial issues.
There are many sources for finding the best debt consolidation program. However, the main question is not where to find it but how to find the best one. There are various sources from where you can gather information. Some of them are:
While you can use these sources to gather information, make sure to check their BBB rating as that will often indicate whether or not they’re one of the best debt consolidation programs available. While I didn’t do this as a part of my research, it may behoove you to check the company’s license to make sure that it is an authentic company.
Once you have found a program and looked through their website to understand what they offer, then either visit them in person or contact them via phone (realistically, it’s unlikely the company you find will be in your local area).
Some important questions that should be answered are:
When I’ve heard of or read complaints about a debt consolidation program it’s nearly ALWAYS because there were unrealistic expectations on the side of the consumer. That may be because the consolidation company promised unrealistic things. It’s important to understand that just because you ask a debt consolidation program to work on your behalf, it doesn’t GUARANTEE they can come to an agreement with your creditors.
To cut straight to the point: your creditors don’t HAVE to lower your interest rate or monthly payment because you’re now working with the best debt consolidation program around. At the end of the day, it simply depends on whether or not your creditors are willing to negotiate — sometimes the debt consolidation company can help with that, and sometimes they can’t.
After you’ve gained a clear understanding of expectations, it’s important to remember that you shouldn’t trust every word you are told by the company. While you may have already done this as a part of step two, do some more research to make sure you’re comfortable with the company before you proceed. Most importantly, search reviews and testimonials on the internet.
Once you have passed all these stages it is time to make the final call and sign on the dotted line. Make sure you read the contract clearly and understand every word. In case there is any confusion waste no time in getting it cleared so that there are no issues in the end.
The reality is that there are hundreds of programs out there. The difference between finding the best debt consolidation program and being involved in a nightmare is the process in which you follow. Do your research, read review, check the BBB ratings, understand the expectations (and what my go wrong) clearly and you’ll set yourself up to make the best decision possible.
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The articles are written by personal finance enthusiasts (not certified professionals) based on their personal experience. What works for them may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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