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You don’t want to reach a point in your life where your debt consolidation company is on your speed dial; but if ever that you do, you know that you are in deep trouble and you need to do your best in finding the right one and maintain a good relationship with them.
Before you even consider getting debt help, here are the four things you should keep in mind when dealing with a debt consolidation company.
- Approach a debt consolidation company only if you are reeeally in deep debt.
Got 2-3 credit cards you’re paying off? Don’t be too tempted to get your debt consolidated just yet. Sure, it’s tempting to pay them all in one go but you need to be practical here. You’ll probably be paying more on debt consolidation than if you were when you’re paying your three credit cards with your current payment rate. You’ll be fine as long as you keep your payments organised and you pay on time so as to avoid fees.
But if you have more than what you can manage and you’re almost at the brink of bankruptcy, then this might be the right time to make that phone call. It all depends on the situation. If it all becomes too difficult to organise and you know it’s a lot to handle, then it’s best to approach a debt consolidation company.
- A trusted and reputable debt consolidation company will offer you honest and useful advice.
Even if you don’t opt for a debt consolidation plan, a good debt consolidation company will genuinely want to help you with your finances. This might come in the form of accessible materials that offer education about how to manage your finances responsibly or giving you truthful answers regarding their products and services.
It’s important to remember that these companies are still financial institutions and at the end of the day, they need to make money from helping you. If you’re going to hire a company to consolidate your debt, you might as well choose one that will genuinely want to help you get out of debt, not sink into it even deeper due to unnecessary fees and excessive interest rates.
- If you agree to a plan, you can never go back.
Well, not literally never, but the consequences of backing out from an agreed plan is so bad that it only makes sense to stay with it rather than leave. Weigh how much you owe now and how long it would take to pay that off regularly versus how long it would take you to pay if you were to opt for debt consolidation.
- Don’t be with a debt consolidation company that over-promises.
Any business would want to get their name out there but if it is at the expense of you getting into even deeper money trouble, then it cannot be good. If your prospective debt consolidation company does any of the following, stay away at all costs and look for debt consolidation loans for bad credit somewhere else:
- They charge you before you can even begin settling your debts
- They give you guarantees of making your debt disappear
- They tell you to stop responding to your creditors
- They tell you that working with them will make all the debt collection calls and lawsuits go away
- They promise that even the unsecured debts will be paid off.
These are just some of the top things to remember before you decide to get help from a debt consolidation company. Think through it carefully and make sure that once you jump onto this service, that you are fully committed to paying until your very last settlement date and that you are in a better financial standing than you were before.