Debt consolidation is an efficient tool that merges multiple, high-interest credit card payments into a single, lower-interest payment per month, which allows you to save money and pay off the loan more quickly. This is an excellent option to manage your credit card debt and regain your finances either through a debt management program, a debt consolidation loan, or a debt settlement program.
Options for Debt Consolidation Programs
Debt consolidation programs include:
- Nonprofit debt consolidation
- Debt consolidation loans
- Debt settlement services
While the first two are for consumers with good incomes and high credit scores, debt settlement services are for people who have high debts and can pay off their debts at low-interest rates. Companies offering debt settlement services work with creditors to negotiate and lower the interest rate on your debt and you can be relieved of your debts within a year.
However, you need to be vigilant and verify the claims of debt settlement companies and check whether they are good enough as they sound. Read the reviews on global news and reviews website like the Fox Chronicle to get good knowledge about such agencies.
The recent review of Ascend Finance scam by Mac Venucci debunks the ridiculous claim regarding the company's marketing gimmicks, assuring the trust and credibility that Ascend Finance has been offering to their potential clients.
How to choose a debt consolidation program?
There are many ways to get out of debt through consolidation, but it is important to be alert and cautious while choosing an option.
- Avoid getting into the trap of credit repair scams that make unrealistically high promises.
- Check if the lender is offering to help you and not to make money from you before enrolling in a debt consolidation program.
- Check their track record of success
- Check their online reviews and testimonials from the clients.
How do they work?
Companies that offer credit consolidation help people pay off their credit card debt in a reasonable way while still having money left over for basic needs like accommodation, food, clothing, and transportation.
Credit consolidation companies can range from big national banks to small non-profit counseling agencies. They are divided into two categories:
- Debt consolidation companies offer loans depending on the credit score.
- Companies without a loan do not use a credit score.
Banks, credit card companies, credit unions, and online lenders offer loans at affordable rates of interest to people with a high credit score that can be repaid in monthly installments within 3-5 years.
Non-profit agencies help people with low credit scores, but look at your income and expenses before giving a loan. Based on your ability to pay off the loan, they offer debt-relief options like:
- Debt management plan
- Debt settlement
- Debt consolidation loan or
- Filing for bankruptcy.
Each debt consolidation program applies to a different individual. If you choose a debt management plan, your credit counselors will negotiate with credit card companies to lower the interest rate and monthly payments on the debt.
You might be directed to a debt settlement company if the debt is too high. Taking the help of certified credit counselors will help you to analyze, which debt consolidation program should be right for you.