Debt Consolidation companies are amazingly keen to how to push all of your most sensitive psychological buttons at just the right time. In fact they’re probably
one of the best industries in the world at doing so.
If you’re so broke that the balance you owe is enough to support some small countries, and you’ve tapped
out every resource there is already to help you get out of this hole that your dug yourself then the commercials and advertisements for these companies that promise
to consolidate your debt for you, giving you one low payment each month must look very tempting. It’s a stressful way to live after all and most people are looking for
any way to get out of it ASAP.
So the question remains then. Should you go for it? Should you consider consolidating debt?
Here’s how it works in a
nutshell if you were to decide to consolidate debt. Basically you’ll be combining all of your debt, all of your outstanding balances, and giving them to the debt
consolidation company. They will then in turn try to negotiate deals with your credit card companies to lower your interest, or give you longer to pay off the
balance.
They can’t make your balances go away, but they can give you some play on interest and payment terms. And basically what can happen is after
trying to get your balances down and give you a longer pay time, they’ll combine the balances and let you pay them one monthly payment each and every month,
that may or may not be lower than the payments you were making.
The negative side of this is first that it leaves a bit of a blemish on your credit score, but
that argument always baffled me because doesn’t it look bad anyways on your credit score to be late for your payments every month? I guess it depends on how
much debt you’ve acquired.
If you were to decide on going this route, one thing that you will definitely do is some research to find the best, most reputable
companies out there. You can go into online forums and ask around, you can check the Better Business Bureau.
Knowing that debt consolidation isn’t
always the right answer you can always take matters into your own hands, and call the companies that you owe yourself and try to negotiate a better deal or
settlement on your balances. They will often settle a debt for pennies on the dollar, just to not take a loss.
If you have success there, you’ll want to get credit
counseling, this way you’ll be more committed to another person to pay off your debts.
Unfortunately you have to figure out what’s right for you, however both
ways can equally lead to the chance of leading a better, less financially stressed life.
