Tips on Debt Consolidation Counseling Programs
Tips on Debt Consolidation Counseling Programs
You’re frustrated with your debt and you’ve decided to take action. Good for you! If you’ve decided against a debt consolidation loan, then you’re probably looking into debt consolidation programs. What are they and how can they help you?
A debt consolidation program will do multiple things for you. One, it will educate you on debt: where you went wrong, and how to avoid making the same mistakes in the future. Two, it will help you minimize your overall debt and save you money in the long-term. Three, you don’t need a good credit rating to take advantage of it. Sounds great, doesn’t it? But if you’re like most people, you’re probably shaking your head in doubt. Don’t be skeptical, they really do work.
To begin with, you need to know how to choose a reputable credit counseling agency. While there are many you can use through the internet, the best advice is to find a local agency. Make sure they are accredited by the Council on Accreditation (COA) and/or the International Standards Organization (ISO), verify their counselors are certified consultants, confirm they have been in business for at least ten years, and last but not least, be sure they are a non-profit organization. Once you’ve done this, give the Better Business Bureau a call and find out if they have any negative reports filed against them.
So, you’ve chosen your agency and you have your first appointment with your counselor. Be prepared with the following questions:
1. Will they attempt to lower your interest rates? What is their success rate? All debt consolidation programs should be able to lower your interest rates; be very wary if you’re told otherwise.
2. How substantially will they be able to lower your monthly payments? What is their average? Be sure the figure they quote is within your budget; if it isn’t, look elsewhere.
3. Do they try to waive any late fees or over limit fees on your existing accounts? If that doesn’t work, will they attempt to lower those fees? What is their success rate? Any reputable agency will be able to work out a repayment plan with, at the very least, reduced fees.
4. What types of unsecured debt do they manage? The answer should be “all types,” from credit card debt to medical bills.
5. What are their fees? The fee should be relatively small. Approximately $100 to set the program up and around $50 per month thereafter is the norm. If the figure you’re given is substantially higher than this, ask why.
Remember, while debt consolidation programs can offer valuable insight on getting your debt managed, the final decision is yours. Never let anyone talk you into something that you don’t feel comfortable with. Shop around until you are assured you have the best program available for your finances.
