As per the finance laws and regulations, all financial institutions, lines of credit and private money lenders are allowed to charge you interest on the amount loaned as their income .This interest is actually the payment of the debtors in gratitude for getting the desired financial help when they needed it the most.
However, if you are not very careful about your rights and the amount of interest charged on your specific loan, you may end up finding yourself in a situation where your debt amount will be difficult if not impossible to repay. It is then you will have to consider and look for alternative ways to get relief from your debts.
When you carry a large load of debt and feel that you can never get out from it like the thousands of Americans, you will need to find a reliable and trustworthy debt consolidation company to get off the debt laden boat.
This leads you to the next important question: how to find a reputed debt consolidation company so that your purpose is solved and you are not left in the same stressful and vulnerable position.
Selection steps to follow
There are a few helpful ways in which you can find an honest and trustworthy debt consolidation company.
- To start with, you must do some research about the company and go through the debt consolidation reviewsof a few of their previous clients. Choose the ones that have the most number of positive reviews. This will ensure that you are in the hands of a trusted company and expect the same positive results.
- Apart from that, you must also know the FTC regulations regarding debt relief, debt settlement, and consolidation and negotiation companies. This will allow you to know what they can legally do and should abstain from doing, their liabilities, power and much more.
- Always make sure that you locate and work with a local consumer credit counseling companies because they are the least harmful out of all the debt consolidation companies. Choosing and working with a local company is a good idea because the local authorities will have jurisdiction over them which they will have little if the debt consolidation company is out of state.
- Look for such companies at The NFCC.org as this is perhaps the best place to search for such companies that are nearest to your zip code. These listed companies will provide the desired relief to you and at the same time not harm your credit.
- Also make sure that you check out with Better Business Bureau about the debt consolidation company. You can visit the official site of BBB online or even can call the consumer protection agency of your state for such matters. You may also call up the state attorney general’s office to find out whether there has been any complaint lodged against the company by their clients in the past.
- All companies want to gain business through ads and marketing and some of this can be tempting and even misguiding. Check out their ads for any pressure sales tactics or anything that is too good to be true. If you gut says it is, then probably they are and it is good to avoid them in the first place. Remember while evaluating an ad that big advertising budget does not necessarily mean that the credit counseling company is good.
- Check for referrals and referral programs because honest and successful debt consolidation companies will rely on referrals more to gain more business rather than relying on sending those “out of the blue” emails to the inboxes of any Tom, Dick and Harry. They actually do not need to solicit their business through continuous television ads, infomercials, spam e-mails, and telemarketing. They will believe more in ‘word of mouth’ marketing campaign.
- Also check their membership with any reputable debt consolidation organization such as the National Foundation for Credit Counseling mentioned above or the Financial Counseling Association of America, FCAA. If they are, they will always adhere to the strict standards of providing debt relief showing absolute professionalism. If they are accredited they will use only certified credit counselors and follow the best practices.
- Also check the qualifications of their counselors and select a debt consolidation company that has counselors who are certified by NFCC. Since debt consolidation monthly payment fees varies according to the state law ask them about it as this is the best way to test the counselor’s knowledge about the specific regulations for the state of your residence.
- Make sure that you steer clear from those companies that pay their counselors a commission as that will surely influence the number as well as the nature and type of services they will decide and offer to you for the best of their interest and not yours.
- Make sure that all their services are personalized and designed according to the need and financial situation of the each debtor. A ‘cookie cutter’ or a ‘one size fits all’ approach will surely not address your specific financial situation both at present as well as in the long run.
- Privacy and security is another assurance that the debt consolidation should provide to you because financial data is sensitive and confidential. If this is lacking, select another agency.
Lastly and most importantly, you should get it all in writing and any company that hesitates to do so should be summarily rejected. This should include:
- A good faith estimate about fees, time taken and the amount of money saved
- The way the services will be performed
- Name of the counselor, business, address and contact information
- Ways in which the payments will be distributed to your creditors and much more.
It is also good to know about the ways in which the agency is funded. If the agency claims that it is not-for-profit or tax-exempt, double check their status with your state charity official because it is illegal to claim so when it is actually not.
To sum up, look for their accessibility, availability apart from their license as well as whether or not they provide budget and credit education.