Searching for the most convincing way to deal with a huge debt burden? You can approach credit counseling agencies for some relief. They have several debt consolidation programs, most commonly known as debt management plans; to get you out from the trap you are in.
However, they can be detrimental, if done through non-reputed organizations or for reasons that are not suitable to seek such help. If you are looking for debt relief through debt consolidation options via some agencies, there are certain points that need to be taken under consideration. Let’s have a look at some of those:
Always remember, it is totally a 3rd party payment portal
These are all 3rd party systems that work with certain guidelines. You need to consider those carefully while also judging their market reputation before taking any call. Before approaching an institute, you must read the reviews of top debt consolidation firms available. This would be helpful in gaining some useful information related to the best options available.
Are you tired of dealing with different accounts?
With a suitable debt consolidation plan, you can make only a single payment to the assigned credit counseling agency. This agency, on the other hand, will distribute the required money to each and every of your creditors until the debts get entirely cleared.
This is often considered a great debt relief option to think about. These credit counseling agencies never play any role in settling the debts or taking loans. Rather, they have suitable arrangements with most of the leading financial institutions.
When repaying the debts with the help of these credit counseling agencies, you have to pay lower interest rates or fees. This helps in letting your payment go more towards the balance rather than for any finance charges.
But, then, if you get linked to an agency, which never offers any kind of concessions, the entire benefit part on the tax redemption get totally reduced. So, you must be careful while looking for a credit counseling agency.
All debt consolidation plans are more or less similar
Analysts believe that every debt consolidation plan available in the market is basically the same. In fact, financial institutes never give any preferential treatment to organizations based on their repute. For any financial institution, every organization is the same, be it a non-profit, an NGO or an MNC.
Agencies and employees may vary from one financial institute to another, but the plans remain the same. In short, every plan is basically structured in a similar way. It solely depends on your counselor to determine, how much it is going to charge you for clearing the debts to the creditors in full, within a certain time-frame (take it 3 years to 5 years).
The payment done is basically 2.5 percent of the entire debt. However, in situations of severe hardships, there is room for wiggling. You can stop the plan any time you want. At the same time, you can also pay more amounts to get out of the debt faster.
Do you think there is any other point to take note of, in this regard? If yes, share your ideas with us.