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Combining Debt - Frauds In Debt Consolidation
Pay Off Debt Dues Faster. Low Interest Rates - that is the buzz.
The fact is that actually the debt consolidation company benefits from this one. They buy - yes buy - a lower rate of interest from the company you owe money to by negotiating payment of thousands of dollars of debt. You are charged an amount for this service and a monthly fee after that.
The debt consolidation company pays off your loan fast, you don't. You keep paying them rather.
If you thought making regular repayments by your due date was expensive, try making ONE LOW Payment monthly.
These companies only buy bad debt to reduce the interest. They will buy groups of debt - thousands of dollars of debt from a firm to get the lower interest rate - plus they get a percentage kickback from your loan company to reward themselves for payment of that debt.
Debt consolidation scam fees are included in your monthly payment - So practically you pay as much as you might have if you had sent that extra payment to your credit company and paid off your higher interest rate credit card quicker by adding that extra fee to your payment every month. Actually, you pay more.
They don't re-negotiate your payment date. That means that they pay everyone's payment at the same time, once a month.
If they repay on the 15th of the month and your payment was payable on the first, then your credit will get a 30-day late payment once a month - every month-on all three of your credit information. Late payments stay on your credit history for 7 years (or more). Feeling good now, I'll bet!
That's not all. You could also be one of those individuals whose payments get missed once in a while - Yes it takes place all the time with Debt Consolidation techniques.
Negotiation is something you can do by yourself. If you just hate talking to these people you can even approve someone you know and trust to negotiate a lower interest rate for you on your behalf. If you can't get anywhere negotiating with the first person you talk to, ask to talk to a manager. If you can't get anywhere by the third supervisor, you're stuck.
- Negotiate your own reduced Interest rate
- Extend your repayment schedule
- Pay off the maximum interest debts First and add extra money
- Write 2 checks: One for the least payment and One for any additional money with a note in the memo that states: "Principal Only Payment." This one simple step can save you tons of money. If you don't state this, your money is automatically applied to the interest and you'll pay more interest for an extended period. Yeah, that really sucks, definitely not for them. For you.
- Figure out - there are cost-free debt calculators all over the internet - what it would take to pay your highest interest cards first. I plugged in my own and came up with the fact that if I add $60 a month to my minimum credit card payment, I can have a $1300 debt cleared in 12 months with $66 interest.
- If I continue with the minimum payment, It can take more than 6 years and cost me over $2500. Simply that one action that I took put over $1134 back in my pocket - in one year. And I did it personally. Without debt consolidation fees!
I don't recommend any debt consolidation company. They prey on your desperation and the doom and gloom of the length of paying out your credit cards at minimum payments.
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