Debt consolidation companies have few critics. After all, they work with a magic wand in their hands to reduce your monthly repayment obligations. You are happy since you have to write only one check and they are happy since they are receiving their fees for the service. Not to miss out the lender, they are the happiest since they have greater chances of getting assured monthly installments which will save them the expenses of litigation or prospects of impending default by the borrower. So, debt consolidation stores offer a win-win solution for all the parties.

The company representatives will bear expression of shock and disbelief when you will tell the total interest rates being charged from you by the payday loan companies. Their grim faces will be conveying that you are on a suicidal course and there is not much hope for survival, except when you take their help. With great confidence in their capabilities, they will promise you a debt free life much sooner than you expected. Since you are looking for a way out of your debt problems, you would be inclined to take their help and may not have any option but to believe them.

Stop there! You are wrong. You do not have to be a financial wizard to see through their claims. Simple arithmetic and lots of common sense is what is required to ascertain whether they are making right promises or taking you for a ride. First, you must ask them how the debt consolidation plan will actually work. They will outline one concrete plan or give you the option of choosing the best plan for yourself. Second, ask them how much will you save on monthly basis. You must take into account their fees and all other direct or indirect expenses. Third, you shall ask them what are the ways to ascertain that the money has been debited from your account to be paid into the lenders’ account before the due date? Fourth, get all their promises in writing in the form of an agreement which shall clearly define the duties, rights and obligations of each of the parties and their terms and conditions. You must make sure that the agreement also stipulates the penalties if the promises are not kept. Normally, you will find that the agreements contain more provisions on your rights, obligation and consequences of not keeping these. Your indebtedness works to their advantage but your skills and wisdom can make a reasonably balanced payday loan debt consolidation agreement.