There is nothing fun about being in debt. It’s an awful experience that has a way of permeating other facets of our lives. No wonder being debt free is such a popular goal. A bill consolidation service is one way people use to achieve that very goal. Just so we’re clear, this isn’t a forgiveness of your debt that somehow let’s you off the hook. Instead, it’s a service that is offered by various lenders to help you reduce the overall total of what you would owe if you kept paying the way you are now. Consolidation services will often negotiate with your creditors to lower your debt.
Such services are especially useful to those that don’t own their own home. These people are not able to get home equity loans. However, homeowners can and do use consolidation services. Let the service go to work for you. They will help lower what you owe, and then you will pay them a lump sum each month and they will distribute it accordingly. The amount you pay them each month is usually much lower than your current amount.
At this point, you may be thinking it would just be easier to do this yourself. And there’s really no reason why you can’t try it. However, keep in mind that the professional services have dealt with creditors hundreds or thousands of times. In other words, they know how best to deal with them, and get you a better rate than you’re likely to get on your own. They also have more credibility in the eyes of most creditors, so they are taken more seriously.
The key is to choose wisely when you are looking for a consolidation service to represent you. This will help you get the lowest payment possible, as well as a fewer total number of payments. On the other hand, if you don’t do your homework and go with a not so good service, you’re payments will last longer and cost more.
So, what points should you consider before selecting the right company for you? What is their track record like? How long have they been in business? Were they referred to you by someone you trust? Are they a non-profit? Treat this as you would any other major financial decision. Ask your family and friends. Check with your state’s regulatory agencies and the Better Business Bureau to see if there is a record of complaints. All of these things should enter into your final decision.
There is one final thing to remember as you start trying to find the right bill consolidation service: All of them will benefit greatly if they can get you to sign up with them. This means some will say just abut anything to get you to sign up with them right away. Don’t do it! At least not right away. Take some time to think about the offer and look at it logically. Jot down a few figures and see how they compare to what you need. Doing these things will lead you to making the best choice.