Debt consolidation program helps you pay off your unsecured bills through an easy and single monthly payment plan. This program helps you pay only one bill instead of 7 or 8 in every month. It becomes easier for you to maintain a healthy lifestyle.
Check out the following topics to get credible information on debt consolidation program and compare your different options.
What happens in debt consolidation programs?
A debt consolidation program makes it possible for you to pay back your creditors through a single monthly payment plan.
Find out what happens in this program through the following 4 steps.
- Get a free analysis of your financial situation: The debt counselors make a thorough review of your income and expenses during the no-obligation free counseling session. They collect all the information about your creditors, interest rates on several loans and monthly payments. They'll ask about the amount you can pay every month. Once you get a clear idea about your affordability, they will finalize their negotiation strategy.
- Sign a written agreement: You can ask several questions to the counselors during the free counseling session. For instance: You can ask about the amount you've to pay on a monthly basis. You can even enquire about the fees. If you're happy and satisfied with the counseling session, then you can sign-up for the debt consolidation services.
- Get relief from the creditor calls: Once you've cleared all your doubts and signed the required documents, the counselors contact your creditors and start the negotiation process. They develop an affordable repayment plan and put it forward to the creditors. They have several discussions with your creditors to lower your interest rates and eliminate the late fees.
- Pay only bill to the company: After the counselors finalize a payment plan accepted by all the parties, start sending money to the consolidation company every month. Just make a single payment to the company every month. They will send the negotiated amount to all your creditors.
Usually, the counselor asks about your financial situation after 180 days. If your financial situation has become bad, then notify the counselors about it. The counselors will re-negotiate with your creditors for a new payment plan as per your current financial situation.
How can these programs help you start a new financial life?
The program helps you start a fresh financial life in the following ways:
- It helps you make a lower payment every month
- It helps to reduce the number of calls you get from creditors
- It leaves you with only one monthly payment plan
- It helps you repay your bills within 2-5 years
- It helps you improve credit gradually
- It may help you knock out the fines and late fees
You can check out the benefits of these programs to know how they help you get a fresh financial start.
What factors do you need to consider before consolidation of debt?
You've to consider a few factors before consolidating your bills into a single monthly payment plan.
- How much you want to consolidate: Various companies have a limit on the amount they'll permit you to consolidate. Some companies have a minimum limit. For instance: if a company's minimum limit is $2500, then you won't be able to enroll into the program with $1000 worth of loans.
- How much you've to pay on fees: The consolidation companies will ask you pay a specific amount on the fees. Calculate the fee and find out if it is within your affordability.
- How much you need to pay on interest rate: The main benefit of consolidating your debt is that you'll pay less interest rate on the bills. Lower interest rates and monthly payments are undoubtedly enticing but it would be wrong to enroll into the program just because of these reasons. Find out if the repayment term has been stretched because of the lower rates. A long repayment term can make you spend more in the long run.
What kind of bills can be paid off through the program?
You can mainly pay unsecured bills through debt consolidation help. Here are some bills that you can pay:
- Credit card bills
- Departmental store cards
- Personal loans
- Medical bills
- Collection accounts
As far as student loans are concerned, you can try to pay them through secured or unsecured or bad credit debt consolidation loans.
How can you get the best debt consolidation program?
You need to shop around a little bit to find out the best debt consolidation program. Here are a few tips that can help you get the best program:
- Find out what others are saying about the consolidation company from the Internet
- Check out the accreditation of the company
- Find out the fee structure of the company
- Get detailed information about the program
- Ask your friends to suggest you a good company
- Try to know if the counselors are certified
The best way to choose the right program is to make a comparative analysis of different consolidation companies in your locality. Check out the list of some reliable companies and then compare the programs to choose the best one for yourself.
What are the reasons behind the popularity of online debt consolidation?
A reliable online debt consolidation company with a good financial background and reputation can help you have a fresh financial start. They can help to accelerate the repayment process quite significantly. This is one reason why the online consolidation companies have gained so much popularity amongst the masses.
Check out the other reasons behind the increasing popularity of the companies.
- You can get debt consolidation help 24*7
- You can make the monthly payment quickly
- You can get free counseling online and save time
- You can compare various online companies from your home
- You may get fast debt consolidation service
Can you consolidate multiple bills for free?
Usually, most companies don't offer free debt consolidation service. However, there are 2 ways in which you can consolidate your bills for free.
Check out the 2 ways to make the best decision for yourself.
- Consolidate your bills on your own: It is not that only a consolidation company can help you get an affordable payment plan. You can negotiate with the creditors and set up a reduced payment plan for yourself. Check out the steps to consolidate bills yourself.
- Approach a non-profit company: A non profit debt consolidation company won't help you consolidate bills free of cost. However, you can pay nominal fees to the company and fulfill your financial obligations.
Apart from a consolidation program, there are some other ways to replace your multiple bills with only a single monthly payment plan. The other ways of consolidating your bills are (a) through a debt consolidation loan (b) through credit card balance transfer.