Free debt consolidation companies sound like music to the ears, the solution provider to all arrears running bad and adding stress.
Free debt consolidation companies are usually non-profit organizations that come to rescue of non-payers burdened by multiple loans.
They look at collating all payment options against all your loans and arranging for a one-stop solution.
Compound All Debts And Repay The logic is that, you get one big loan that takes care of all your existing loans and debts.
Consolidation companies compound all the arrears and arranges towards easy and systematic repayment.
How It Works- 1.
The company will collate and analyze all existing debts, categorizing them in order of priority, rate of interest, amount, terms etc.
2.
All accounts, balances and other sources of repayment are then given to the company.
3.
These are consolidated and the creditors are approached to rework payment terms and conditions.
4.
One single payment is made to the debt consolidation company and in turn, the company disperses the amount to all the creditors.
While some companies charge for these services, some offer these services without charge.
They may not literally be at no cost, as the name suggests, but: A flat charge is levied instead of percentage of loans, as is in most cases.
The actual creditors ensure repayments and subsidize these companies and hence the debtors are not charged.
Assistance is required in case you are majorly stressed from liability, your mailbox is filled with reminders or cash is not available handy.
These companies either streamline your existing resources or lend you a larger loan to repay your arrears as home equity loans, second mortgage etc.
The point to remember is that, there are "no complimentary lunches" and all free consolidation companies must be thoroughly investigated.
A recent study and report has suggested seven reasons to not sign up any consolidation company, whether gratis or not: These Are: 1.
High Charges - A standard monthly maintenance should not exceed $25.
2.
Voluntary charges - They may use this guise, but actually pressurize you to pay higher charges.
3.
Aggressive approach - If you find the company to be very aggressive in approach and see them instantly promoting loans, do avoid them.
4.
Commission based advice - Avoid counselors who are led by commissions to decide on course of advice.
5.
20-minute test - Any good consolidator should take at least more than 30 minutes to analyze records and reach an initial decision.
6.
One solution for all - Each problems needs a different and tactical approach and beware of the ones, who have one standard solution.
7.
Heavy Advertising - Do not get carried away by attractive, yet misleading advertisements.
Besides these points, always remember to get a quote from all companies.
Do not trust a company that charges a fee to analyze cases and suggest solutions, even before starting work.
Any good company will assess your case and review the paperwork to reach a quote for consolidation and services provided.
Even free debt consolidation companies would assess your case and reach a system of procedure and costs expected (if any) to consolidate loans.
Free debt consolidation companies are usually non-profit organizations that come to rescue of non-payers burdened by multiple loans.
They look at collating all payment options against all your loans and arranging for a one-stop solution.
Compound All Debts And Repay The logic is that, you get one big loan that takes care of all your existing loans and debts.
Consolidation companies compound all the arrears and arranges towards easy and systematic repayment.
How It Works- 1.
The company will collate and analyze all existing debts, categorizing them in order of priority, rate of interest, amount, terms etc.
2.
All accounts, balances and other sources of repayment are then given to the company.
3.
These are consolidated and the creditors are approached to rework payment terms and conditions.
4.
One single payment is made to the debt consolidation company and in turn, the company disperses the amount to all the creditors.
While some companies charge for these services, some offer these services without charge.
They may not literally be at no cost, as the name suggests, but:
The point to remember is that, there are "no complimentary lunches" and all free consolidation companies must be thoroughly investigated.
A recent study and report has suggested seven reasons to not sign up any consolidation company, whether gratis or not: These Are: 1.
High Charges - A standard monthly maintenance should not exceed $25.
2.
Voluntary charges - They may use this guise, but actually pressurize you to pay higher charges.
3.
Aggressive approach - If you find the company to be very aggressive in approach and see them instantly promoting loans, do avoid them.
4.
Commission based advice - Avoid counselors who are led by commissions to decide on course of advice.
5.
20-minute test - Any good consolidator should take at least more than 30 minutes to analyze records and reach an initial decision.
6.
One solution for all - Each problems needs a different and tactical approach and beware of the ones, who have one standard solution.
7.
Heavy Advertising - Do not get carried away by attractive, yet misleading advertisements.
Besides these points, always remember to get a quote from all companies.
Do not trust a company that charges a fee to analyze cases and suggest solutions, even before starting work.
Any good company will assess your case and review the paperwork to reach a quote for consolidation and services provided.
Even free debt consolidation companies would assess your case and reach a system of procedure and costs expected (if any) to consolidate loans.