Debt Consolidation Companies?
Question:
Answer:
Debt consolidation companies that claim to reduce your debt make you pay a monthly payment, and when they have enough money saved up, they will negotiate settlements with your creditors. In the mean, no payments are made to the creditors so they will still be contacting you and report as past due and settled accounts to your credit bureau. So, it may save you some money, but your credit is shot for a while. Plus they will charge a monthly fee.
Credit counseling agencies make payment arrangements with the creditors based on the creditors policies. Creditors will reduce their interest rates and stop fees but will still get the full balance. Generally your payment is lower. It's also designed to pay off in 3-5 years. The creditors may notate the account that it's being paid through a credit counseling agency which may show as deragotory to some lenders. In the long term, since the debt is paid off, it won't be as bad.
In conclusiong, Debt consolidation or settlment companies may save you money, but it will hurt your credit. Credit Counseling will help your credit in the long term, but be more expensive since you pay back the full balance.
I know that's more than you wanted to know.
check with the bank that you use and see what they have for you.
Forget it. They take a percentage while your credit goes to crap. Be creative, and take advantage of zero % offers. DON'T use the cards and discipline yourself to pay-off so much a month (on the deadline) until it's paid-off (roll it over and over until you've met your goal). Why is this the BEST alternative? Because it disciplines your spending AND it will get you out of debt. HELLO? A LESSON LEARNED!
I dont think so..but read the fine prints..here is an article which would help you:
Debt Consolidation - Get Out Of Debt
http://www.askaquery.com/answers/qn1643.
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