There is no such thing as free debt consolidation
services. Credit counseling services that offer debt consolidation for
free or with no fee may have hidden
fees attached to their schemes.
Debt consolidation companies are funded
by your creditors and are waiting to make extra money off you.
If you have massive debts, enrolling in a debt consolidation service can
help you bring down your rate of interest and your amount of
repayment. Soliciting the help of a free debt consolidation service
will be cheaper than it would to get the same service from a for-profit
company.
Risks of Free Debt Consolidation Services
For-profit debt consolidators charge a flat fee per month and
competitive charges over and beyond the flat fee; whereas free debt
consolidators are subsidized in part by creditors, so they need only to
charge the flat monthly fee, which means that debtors will ultimately
end up with lower rates.
For-profit services prefer clients with relatively good credit, as they
are more likely to get the full repayment. Since
debt consolidation
companies that offer free services enjoy healthy subsidies from the creditors, they can afford to
take the risk of helping people with poor credit who want to set their
finances right.
What is your level of debt? If you have poor credit free debt
consolidation services are more attractive than for-profit services.
However, scam companies have been quick to exploit this preference and
proclaim themselves as free services. If you do not want to end up with
even more massive debt you need to confirm the credibility of any
organization that claims to offer free services.
Finding Free Debt Consolidation Services
Free debt consolidation service could mean free quotes, or else free
first-time sessions with counselors. The services guaranteed will have a
charge attached, unless you land with a company out to help people get
back on track without burying them deeper in debt.
One of the better services for debt consolidation is United Way and its
affiliates, which include a number of Credit Unions. Anyone affiliated
with the government also will help in most instances without jacking you
for more money.
If the services are affiliated with the government, you
better believe they will be towing the line, since the government's
privacy is at stake.
So, if you need debt consolidation agencies that offer no fee or free services, seek out the companies
that affiliate themselves with the government. And if you go
directly to the source -- the government -- you can find more
information about free debt consolidation on various government
websites.
