Debt consolidation companies needed? Are you facing a credit or debt crisis with outstanding balances on a number of different accounts? Over $15,000 in debt? Then we can help you. Do you want to Consolidate all of your debts into one place, reduce your interest rates and lower your monthly payments?
Debt Consolidation: Consolidation is the process of combining all your debts into just one. You then make a lower payment by taking out a loan to pay off your creditors. The aim of consolidation is to have a lower payment at an interest rate lower than your current one. Debt consolidation is also often called credit consolidation or bill consolidation. It is a longer term financial strategy that can help you get out of debt. For example, it could be period of 3-5 years to totally eliminate the debt.
Types of Debt That Can Be Included In a Consolidation Service: There are a range of debts and the first thing to do is to identify whether your debt is unsecured or secured. Secured debt is related to collateral. For example, home mortgages and auto loans are secured debts. Unsecured debts are lines of credit or loans with no collateral involved and includes medical bills and credit cards. We only deal with unsecured debt.
Does Using Debt Consolidation Companies Affect Your Credit?: Overall, consolidation has a positive effect on your credit score as long as you consistently make payments on time. There are two major factors related to the effect on your credit score. They are a) the actual debt consolidation program you choose and b) how committed you are to making payments in a timely fashion?
If you take a loan from one of the debt consolidation companies, your credit score has already been affected by your poor payment history. But by paying off all your debts with a new loan then your credit score should improve almost immediately. Once again, making consistent timely payments on the loan will help improve your score over time.
Consolidation Loans for Folk With Bad Credit: Low interest rates are available for direct loan consolidation, but these rates are usually kept for people with an exceptional credit rating. If you’ve had problems with finances previously, it is unlikely you will qualify for these lower rates. Consolidation loans for bad credit, quite often have higher interest rates attached.
However, once you’ve discussed your situation with our financial experts and have the discipline to persevere with a longer payment period, then debt consolidation might well be worth the sacrifices required.
Do Lenders Have a Negative View Of Debt Consolidation Companies? The majority of lenders see consolidation as a solution to paying off obligations.Bankruptcy is the alternative, in which case unsecured debts go unpaid and secured debts (auto or home) have to be foreclosed or repossessed.
Neither of those choices is liked by lenders. Some negative impact may be seen in the early period of a consolidation program, but if you make consistent, timely payments, all your credit history, credit score and appeal to lenders will increase over time.
More About Debt Consolidation Companies: Due to a new financial rule, there are things a company legally must disclose to you before you enroll in its program. These include giving you educated estimates of the potential length of your program, the cost of your program, your rights as a consumer, and the fact that you are still responsible for your debts and may receive collection calls.
We provide you with an upfront estimate of how long your program will take. In addition we never put pressure on you to disclose personal information, such as your bank information, before you enroll into our program.
We have a detailed Truth and Transparency section dedicated to explaining the processes of our program and the FTC regulations. We never charge upfront fees and in fact legally we cannot do so.
You will be provided with a personal advisor who manages your account for the duration of your program. This personalized attention and familiarity with your accounts is especially important because of the amount of time a consolidation program takes.
Accreditations: The American Fair Credit Council (AFCC), formerly known as the TASC, advocates for consumers. To be AFCC accredited, a company must be
fully compliant with FTC regulations and undergo an annual renewal process.
The International Association of Professional Debt Arbitrators (IAPDA) offers certifications and exercises for debt specialists. The employees at companies that are IAPDA certified have been professionally trained in debt management best practices and upholding ethical standards.
Are consolidation loans taxable? The IRS does not tax a debt consolidation loan. More importantly, it does not allow you to deduct interest on a debt consolidation loan unless you put up collateral, such as a house or car.
Do debt consolidation companies worry if you have a limited income? Consolidation loans are difficult for people on a limited income. You will need a good credit score and sufficient monthly income to convince a lender that you can afford payments on the loan.
Note: We can’t help you if you live in Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Kansas, Kentucky, Maine, Mississippi, Nevada, New Hampshire, New Jersey, North Dakota, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington State, West Virginia, Wisconsin or Wyoming.