Debt Consolidation Lending — Are All Debt Lenders Created Equal?
The short answer is no—all debt lenders are not created equal. Unfortunately, there are companies out there that exist simply to prey on others’ misfortunes. It is extremely important to compare companies before deciding to work with one, especially if you're already struggling with your finances. This article will explain some of the things you should look for in a debt consolidation lender:
The Company Is Reputable
A reputable debt consolidation company (1) has been in business for a substantial amount of time, (2) does not have consumer complaints filed against them with the Better Business Bureau or Consumer Reports, and (3) is recognized as reliable by other credit companies. Credit companies also work with debt consolidators, and they have better resources to check the company’s reputation.
They Offer Debt Counseling
The purpose of debt consolidation is to both get you out of debt and teach you how to stay out of debt. Reputable debt consolidation companies will pair you with a debt counselor who will go over your finances and teach you how to better control your money.
They Have Reasonable Rates
A reputable debt consolidation company will not charge you for an initial consultation or quote. The best way to compare fees between debt consolidation companies is to use a website that offers side-by-side comparisons. Never enter into any loan contract without first making sure you are getting the best deal, especially if you're already struggling with debt.
Recommended Debt
Consolidation Companies:
Our Recommended Debt Consolidation Companies:
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Helpful Tips:
- Apply with more than one company to compare offers.
- Study your options before committing to a debt program.
- Cut out small luxuries to pay down debt at the beginning of your debt reduction program.
Debt consolidation companies vary in what types of consolidating solutions they offer. There are debt counseling companies, debt settlement and negotiation companies and debt management companies.
Debt Counseling - Debt counseling companies offer, usually, non-profit services to help you reduce the amount you owe on your debts. However this service may hurt your credit ranking. Talk to the company and find out if what they do will affect your credit ranking.
Debt settlement and negotiation - This is a process where a company will negotiate a lower payment or lower amount owed to the lender, on your behalf. Sometimes this can hurt your credit also. Debt settlement companies vary in their techniques. Before you choose a company, make sure you read through some reviews about that company before you start.
Debt Consolidation - Debt consolidation is where you take out a new loan in order to consolidate and pay off all existing debt. This usually lowers your overall payments and reduces the amount your paying every month. Not only does debt consolidation not hurt your credit, but it can actually help it.
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