Debt consolidation can be understood as the process of taking a loan to clear the existing debts, including personal loans and credit cards. It is usually done to simplify debt management. For instance, by going for debt consolidation, you will be in a position to make one payment per month as opposed to making multiple debt payments to many different lenders.
Consequently, debt consolidation can help you with minimizing the amount of interest you will end up paying. Although there are many companies for you to choose from, finding the best debt consolidation companies can be a bit tricky.
Here are some of tips you can count on to make the right choice.
Go to Better Business Bureau
The Better Business Bureau has a robust website at which you can find out if a debt consolidation company you might be considering can be trusted. Therefore, it is an excellent place for you to start your research. From the website, you will find information about the company’s accreditation. You will also see if there have been any serious complaints or legal actions against the company. While we’re saying it anyway, it probably goes without saying you should avoid any company whose ratings indicate its credibility is not above board,
Check for Company’s Affiliations
The best debt consolidation companies are usually affiliated with renowned industry associations, such as the National Foundation of Credit Counseling or the Financial Counseling Association of America. If a company is registered by one of these associations, you can consider working with it.
Beware of Non-profit Claims
There are a number of truly reliable non-profit debt consolidation companies out there. However, it is imperative for you to know that there are also many rogue ones claiming to be non-profit for the purpose of misleading you. If a debt consolidation company is claiming non-profit status, it should be willing to provide its certificate as proof. If a debt consolidation company claiming the non-profit status is unwilling or unable to provide the necessary documents to prove it, that is a cause for suspicion and you should avoid it.
Beware of Religious Affiliation Claims
Some debt consolidation companies try to attract customers by claiming that they are affiliated with certain religious organizations. In so doing, their goal is to attempt to build superficial trust by making people feel more comfortable about doing business with them. Unfortunately, most such debt consolidation companies are seldom genuine, and you should not fall into their trap by believing them without doing adequate research.
The Bottom Line
Overall, it is apparent that if you are in debt, the importance of debt consolidation cannot be overemphasized. Indeed, it can be a perfect way of making it simpler for you to manage your debts. It can also help you make significant savings on interest payments.
Sadly though, there are legions of people out there who would rather steal than earn. Although, it could be argued they look upon stealing as earning, in some twisted fashion (but we digress). The point is when it comes to money, everybody people aren’t always on your side. You have to be careful.
This is especially true when it comes to picking the best debt consolidation company. Choosing poorly, when you’re already financially vulnerable, can make things even worse for you. It is on you to perform your due diligence to ensure you choose a credible debt consolidation company whose solutions can adequately meet your needs to avoid debt consolidation scams.