Educating yourself on the debt consolidation process is one of the best ways to keep from being scammed by dishonest debt consolidation companies. There are warning signs that can help keep you from falling prey to one of these companies.
Quote Unusually Low Monthly Payments: A debt consolidation company works with the creditors with the intention of lowering your rate of interests. The creditors would have already predetermined how much could be reduced from the rate of interest. It means that all consolidation programs would get you the same rate of interest. But from 2004 the creditors have declined to accept the reduced minimum monthly payments. Companies who promise you less monthly payments may give you low figure. But eventually they will increase the amount once you are pulled in to the program. Therefore instead of comparing the monthly payments, you are advised to request the company for fees on their service.
Demand All Debts Be Included: Companies may demand that all your debts be included in the debt consolidation. But they may not have your interest in their mind. For, some loans such as credit union loans are not eligible for lower interest rates. Loans like, student loans, may have a lower rate of interest. If you include all your bills in the monthly payment, the company will charge you a higher fee in the name of more accounts as handling charges. Therefore, before committing yourself for a program, think twice on the accounts that could be consolidated for lower rate of interest.
Require A Large Upfront Payment - A commonly used scam in debt consolidation is charge a large fee in advance of hundreds, even thousands of dollars. A few offer to refund such a fee after their customers finish, but in reality people rarely compete these programs. Be aware of this tactic and make sure you don't end up spending any more then absolutely necessary to put yourself in the best possible financial standing.
Look for a company that offers a flat monthly fee. You can usually find a legitimate non-profit company that can offer a flat monthly fee because they are usually subsidized by financing companies. You can find good for profit companies that will also offer a flat monthly fee with the addition of a competitive fee.
Offering Additional Services - Watch out for companies offering additional services. These services, often scams, can include credit repair, debt settlement, and even debt forgiveness. Know what your goal is, and find out how you can realistically achieve it.
Request Account Numbers First: You must be highly suspicious of any company that asks for your account numbers, social security number, or other personal information before providing a quote. If you give all these details just like that it will lead to identity theft and you will be the looser. Simply providing name of the creditor, balances and rate of interest will be enough to get an accurate quote. - 29904
Quote Unusually Low Monthly Payments: A debt consolidation company works with the creditors with the intention of lowering your rate of interests. The creditors would have already predetermined how much could be reduced from the rate of interest. It means that all consolidation programs would get you the same rate of interest. But from 2004 the creditors have declined to accept the reduced minimum monthly payments. Companies who promise you less monthly payments may give you low figure. But eventually they will increase the amount once you are pulled in to the program. Therefore instead of comparing the monthly payments, you are advised to request the company for fees on their service.
Demand All Debts Be Included: Companies may demand that all your debts be included in the debt consolidation. But they may not have your interest in their mind. For, some loans such as credit union loans are not eligible for lower interest rates. Loans like, student loans, may have a lower rate of interest. If you include all your bills in the monthly payment, the company will charge you a higher fee in the name of more accounts as handling charges. Therefore, before committing yourself for a program, think twice on the accounts that could be consolidated for lower rate of interest.
Require A Large Upfront Payment - A commonly used scam in debt consolidation is charge a large fee in advance of hundreds, even thousands of dollars. A few offer to refund such a fee after their customers finish, but in reality people rarely compete these programs. Be aware of this tactic and make sure you don't end up spending any more then absolutely necessary to put yourself in the best possible financial standing.
Look for a company that offers a flat monthly fee. You can usually find a legitimate non-profit company that can offer a flat monthly fee because they are usually subsidized by financing companies. You can find good for profit companies that will also offer a flat monthly fee with the addition of a competitive fee.
Offering Additional Services - Watch out for companies offering additional services. These services, often scams, can include credit repair, debt settlement, and even debt forgiveness. Know what your goal is, and find out how you can realistically achieve it.
Request Account Numbers First: You must be highly suspicious of any company that asks for your account numbers, social security number, or other personal information before providing a quote. If you give all these details just like that it will lead to identity theft and you will be the looser. Simply providing name of the creditor, balances and rate of interest will be enough to get an accurate quote. - 29904
About the Author:
Layla Vanderbilt is the webmaster for a leading website that offers for instant bad debt consolidation advice and guidance.
No comments:
Post a Comment