Research a debt consolidation company with these tips.

Choosing the Right Debt Consolidation Company

Choosing the right debt consolidation company requires homework. Before you decide, you should contact several agencies and interview them. After all, you’re hiring the agency to help you. So you need to know whether they’re committed to doing a great job for you.

Remember to check with your friends or relatives for recommendations. Maybe they have worked with debt management companies and found some they liked. Gather as many referrals as possible, and add these to your list. Also, interview each referral.

Additional Tips for Choosing the Right Debt Consolidation Company

• A legitimate debt relief agency is open and honest. It should be willing to provide you a clear, detailed description of its product and services. If the agency does not answer your questions or its answers are not satisfactory, go elsewhere.
• A reputable consolidated credit counseling agency will give you truthful, useful advice on how to manage your money and use credit wisely. The agency will also help you establish a written budget and offer educational materials and financial workshops.
• The fees charged by a debt consolidation company should be reasonable, meaning a maximum of $70/month for a debt management program. (Fees vary by state.) Free ongoing education on how to manage your finances should be available and accessible – even if you decide against entering a debt management program.
• The agency should have been in business for at least seven years and be non-profit. The advantage of non-profit debt consolidation companies is that they can offer their services for free or low-cost since they are funded in part by contributions from creditors.

Steps in Choosing a Debt Consolidation Company

The last, but most important steps, in selecting a reputable debt consolidation company are reviewing your interview notes and narrowing down the list.

• First, gauge your reactions to the information each company provided.
• How did you feel during your conversations with them?
• Were you comfortable? Were you unsure? If you were uncomfortable, cross off those agencies from your list.

By now, you should have a few final candidates. So, what is your next step? Now you can narrow down the list even further. In order to do this, contact the Better Business Bureau or your state’s Attorney General’s office to check on whether any complaints have been filed against each debt consolidation company. If there were complaints, find out how quickly the company responded. Also, find out whether the complaints were resolved appropriately. Armed with this information, you can now select the best debt management solutions provider.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Our credit counselors are here to help you with debt management.

How ACCC’s Personal Debt Consolidation Program Work

How does debt consolidation work with ACCC? First, a certified counselor from ACCC will assess your current debts and bills. This helps create a manageable budget for you. Once you establish a budget, and if you are a viable candidate, your counselor will provide you with debt consolidation information. If you do go ahead with the personal debt consolidation program, also known as a debt management program, ACCC will work out a plan with your creditors. In the program, you will make one monthly payment to ACCC and we pay each of your creditors on your behalf.

Benefits of a Personal Debt Consolidation Program

• Under the personal debt consolidation plan, your monthly financial obligations will be greatly simplified. This will make it easier for you to budget and stay on top of your payments.
• In many cases, creditors participating in the ACCC debt consolidation program will agree to lower interest rates and to waive existing late fees and over-limit fees. This can have the effect of lowering your monthly payments and reducing the time it takes you to become debt-free.
• In combination with the debt consolidation program, we offer expert debt advice and educational resources.  This will help you stay on the path to a debt-free future.
• Compared to most debt relief companies, ACCC has very low fees.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Consolidate your debt with a debt management program to tackle your debt head on.

What is Debt Consolidation?

Debt consolidation involves combining multiple debts into a single payment plan. Essentially, debt consolidation  simplifies your debt repayment process. With debt consolidation you only have one payment to manage instead of several. With a debt management program, a certified counselor will work with you to adjust your budget to fit in your debt pay off strategy. Then they will work with you to lower your debt repayments as well as interest rates to get you out of debt faster.

How Does a Debt Consolidation Work?

You can  go in the direction of a consolidation loan or a debt management plan when it comes to debt repayment strategy. There are pros and cons of adapting to any one of these strategies. With a consolidation loan you take om a new loan to pay off multiple debts. Ideally, you will have lower interest rates with a new loan than your current debts. However, There are also significant problems and risks associated with loans for debt consolidation. For example, if you’re in a position where you’re seeking to consolidate multiple debts, you may have a sub-par credit rating. This means you’ll likely have to pay a higher interest rate for your consolidation loan.

Also, if you borrow money to pay off your existing credit cards, those accounts can remain open and you’ll have the very real temptation to start using those paid-off cards again.  Worse, if you use home equity to secure a consolidation loan, failure to keep up with the loan payments could eventually put your home in jeopardy.

The Alternative…

The alternative option to a consolidation loan is a det management plan (DMP). Non profit consumer credit counseling agencies such as ACCC creates these programs to consolidate your debt into a single payment. The agency may work with you to lower your interest rates, waive your fees to ensure you have a reduced monthly payment overall.

Is Debt Consolidation Right for You?

There are certain indicators in your finances that will direct you towards a debt consolidation options.

• Multiple High-Interest Debts: If you’re juggling several high-interest debts (like credit card bills), consolidation might help reduce your overall interest rates and simplify payments.
• Steady Income: Consolidation requires a consistent income to make the new, single monthly payment.
• Looking for Simplification: If managing multiple payments is overwhelming, consolidation can streamline your bills, making them easier to handle.
• Desire to Pay Off Debt Sooner: With potentially lower interest rates and fees, more of your payment can go toward the principal, helping you get out of debt faster.

How Can American Consumer Credit Counseling Help?

ACCC offers consumer credit counseling and debt management services designed to assist individuals in navigating their debt consolidation options. Here’s how ACCC can help:

• Personalized Counseling: ACCC provides one-on-one counseling sessions to assess your financial situation and determine if debt consolidation is your best option.
• Debt Management Plans: As part of its debt management services, ACCC can enroll you in a DMP that consolidates your monthly debt payments into one manageable amount.
• Educational Resources: ACCC offers resources and tools to educate you on debt management and financial wellness, empowering you to make informed financial decisions.
• Negotiations with Creditors: ACCC negotiate with your creditors to lower interest rates or waive fees as part of a DMP, further helping to reduce your debt burden.

Bottom Line..

Debt consolidation can be a powerful tool in your debt management efforts. However, it’s not a one-size-fits-all solution. By considering your unique financial situation and consulting with a reputable organization like American Consumer Credit Counseling, you can make an informed decision about whether debt consolidation is right for you. Through personalized counseling, ACCC can help you understand your options and guide you toward a path of financial stability and freedom.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Consolidating debt with bad credit isn’t your only option.

Should you consider consolidating debt with bad credit?

Debt consolidation involves taking out one loan to pay off multiple unsecured debts. This loan usually has a better interest rate than your credit cards, so it saves you some money. As with any other loan, you get a better interest rate on the loan if you have good credit score. If your credit is below 700, you may not get the best interest rate. You may not even get approved at all. Because of this, you should probably look into other options besides consolidating debt with bad credit.

Debt Management Plan 

There are alternative options for those who have bad credit. Technically, consolidating your debt with bad credit isn’t impossible. One of the best options that doesn’t require a good credit score is a debt management plan. A debt management plan works like debt consolidation in that it combines all of your unsecured debt into one monthly payment. However, it is not a loan. There are also no minimum credit requirements. A debt management plan is administered by a nonprofit credit counseling agency, and they negotiate with creditors to get you lower interest rates and waived fees. Clients in a debt management plan with ACCC can get out of debt in five years or less. 

Debt Payoff Options to Avoid

Some options for paying off debt do more harm than good. Debt settlement is one such option. When you settle your debt through a debt settlement agency, you don’t pay off the principal amount. For example, if you owe $10,000 in credit card debt, a debt settlement agency can negotiate with the creditors so you only have to pay $7,000. This can seriously damage your credit score. If your credit wasn’t good to begin with, you could have a very hard time building it back up again after debt settlement.

Additionally, the $3,000 that you supposedly saved by settling can be counted as income by the IRS and can increase your taxable income for the year. Debt settlement agencies also charge high fees, so in the end, you probably aren’t saving any significant amount of money.

Final Thoughts on Consolidating Debt with Bad Credit

Consolidating debt with bad credit may not be possible through a traditional debt consolidation loan, but instead through a debt management plan. A debt management plan can help you improve your credit score as you pay off your debt. When you finish the debt management plan and have a better credit score, you can rest assured that you will get good interest rates on any future loans and lines of credit. Just be sure to use credit responsibly!

If you struggle to pay off debt, ACCC can help. Schedule a free credit counseling session today.