PostHeaderIcon Do debt consolidation companies realy help ?


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I have a steady job now. would a debt consolidation help me? Or would it just get me into more debt? Which companies can I trust ?

4 Responses to “Do debt consolidation companies realy help ?”

  • krollohare2 says:

    They can. You need to find one with a good track record. Check with the Better Business Bureau online.

    The whole idea is that you and a credit counselor gather together your most recent credit card statements.

    The company then sets up a budget and debt management plan. They then propose that to all of your credit card providers and they, in turn work out a deal so your interest rates are lowered potentially and late fees and other issues are resolved.

    From there forward you make your payments to the company and they then pay your credit cards based upon the plan.

    There are some fees involved depending on which state you’re in.

  • Charles P says:

    The vast majority of debt consolidation companies do more harm than good. They charge hidden fees and quite frequently leave a person in worse credit standing than when they started. I’ve had clients that used them before coming to me after they discovered that the debt consolidation company was missing or late on payments. Essentially your putting your credit in their hands and if they mismanage it, you pay the price. The best way to handle your debt issues are to enlist the help of a qualified and knowledgeable mortgage professional who is proficient in credit repair. Having someone analyze your credit report and strategize a viable plan for recovery is invaluable. Many people fear using the equity in their homes to restructure their debt but, if you work out the numbers, in most cases, the debt can be repaid much quicker this way. Because the interest rates on most mortgages are much lower than that of credit cards, using a timely refinance can have your credit card debt repaid in one tenth the time. here’s how it works. Say you own a home and your mortgage balance is $150,000. You currently have a 7% interest rate. Your principle and interest payment would be $997.95/month. You also have $50,000 in unsecured revolving debt with an average interest rate of 17.99% Say your total monthly minmum payments for the credit card debt is $1100/month bringing your total monthy payments(mortgage + cc debt) to $2097.95/month. If you were to continue to make minimum payments on the credit cards, it would probably take you 15 years to pay off that debt. If you refinanced that debt into your mortgage at 7%, your new mortgage balance would be $200,000 and new monthly payment would be $1330.60/month. Now you can go in many different directions with this, for simplicity, I will address the 2 far ends of the spectrum. If you were paying a total of 2097.95/month between your mortgage and cc debt prior to the refinance, and applied that full amount to your mortgage, you will have paid off that cc debt in 4.5 years and still have reduced your mortgage balance by as much as you would have if you had not refinanced and continued to make regular monthly payments. Now, taking this a step further, and continuing to make this elevated payment on your mortgagebeyond that point, you will be able to pay off your mortgage in full as well as that 50,000 in cc debt in 140 months or a little over 11.5 years. That’s correct, you will have paid off the mortgage and cc debt in less than 12 years! over the course of the 11.5 years you will have paid a total of $293,713. Conversly, leaving things as is (seperate) it would take you 30 years to pay off your mortgage, paying a total of $359,263($997.95 for 360 months.) plus you would have paid around $100,000 for that $50,000 in cc debt and it would take you 10-15 years to pay that off. Leaving things as is, you would end up paying $459,263 for both the mortgage and the cc debt, with the mortgage taking 30 years to pay in full. Refinancing you would be debt free in 11.5 years and save $165,550 in interest. Now, the other end of the spectrum-if your goal is simply to reduce your monthly expenditures and free up as much cash each month as possible, refinancing the cc debt and making your regular mortgage payment of 1330.60/month would save you $767.35 per month. Of course, there are infinite possibilities in between. Hope this was of some benefit.

  • See Saw says:

    Choosing online debt consolidation is very convenient as it allows you to total all your debts into a single one and then make a payment once a month. The companies offering online debt consolidation allow the interest paid to be treated as tax deductible.

    These debt consolidators are spread widely and can be contacted easily. Their websites provide all the information needed to help you make the decision. These sites also have links to other consolidators’ websites to meet your needs. They may even offer you online quotes. They provide non-disclosure agreements so that your private information remains private.

    Some companies expect you to own your home or pay your dues by checks. They provide free credit counseling to inform you about the various options that you can use to consolidate your debts better which sometimes has reduced debt by 50%.

  • sarah says:

    NOOOO! You can easily do what they do on your own. I blog about fixing your own credit diy at:
    http://love-your-bad-credit.blogspot.com

    I’ve raised my scores from a 550 average to around 700 in less than a year!

    good luck :)

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