Posts Tagged ‘Debt consolidation loans’

How To Choose The Best Company For Debt Consolidation Loans?

Debt consolidation loans can be the right choice for those who are trapped into different types of debts in such a way that they find it very difficult to pay off the same or at least just manage their finances properly. Before you learn how to choose the best company for these types of loan programs, you must first have a clear understanding about how these programs work. The process is very simple, at least in theory. All your debts are consolidated into one single big loan and then you are asked to make a single monthly payment toward that big loan. As part of the process, penalty charges, late fees, and other additional charges are either waived off completely or at least are reduced to a comparatively much lower amount. Depending upon your specific situation, you may even be offered a longer repayment period that will result in smaller monthly payments, something you can easily afford. For this service, the debt consolidation company will charge a certain amount of fee. The only problem is that not every company that provides these types of services is genuine out there. You have to be very careful before you sign up for any such program. Following are some basic steps that you must follow, as it will help you make sure that the company you are signing up with is a genuine and legitimate one.

The Fee Must Be Reasonable

The main reason why you are considering debt consolidation loans is that you want to get rid of your debt problems that have grown to such a high level that things have become quite unmanageable for you. With the kind of situation you are already in, the last thing you want is more financial liabilities. So, the first thing you have to look out for is the amount of fee a company is charging for this type of service. Is the fee reasonable? The fee may range from just 2% to as high as 20% or even more of the total outstanding debts that you owe to different creditors. Reputable companies should charge in the range of 2-8% of the total outstanding debt. Better, if they charge a small amount of flat fee on a per month basis.

Do A Thorough Background Check

Just because a company is offering debt consolidation loans at a very low fee, it does not mean that it is a legitimate one. Many unscrupulous companies try to attract “customers” by making alluring offers, but all they do is just run away after taking your money. Many others who do not run away may not do what they promise. Therefore, it is very important for you to do a thorough background check before you sign up. To start with, you must check their record by contacting the Better Business Bureau. The BBB maintains records of each and every business. The records there will let you know how long the company has been in business, whether they are duly licensed or not, which business organizations or associations they are a member of, and whether there have been consumer complaints against them.

Get A List Of Existing Customers And Contact Them To Know Their Experiences

Before you sign up with a company, ask them to provide you a list of their existing customers who are currently using their services for debt consolidation loans. Though you can read the testimonials on the company’s website, you are recommended to contact those existing customers either on phone or by personally meeting them. You can request the contact details from the company itself. The problem with the website testimonials is that they can be false or may contain manipulated information. You can also research the reputation of the company by visiting related forums and asking questions about them. You are likely to get responses from those who have already used services from that particular company. Depending upon whether the existing customers have good or bad experiences with the company, you can make an informed decision accordingly.

Get Everything In Writing

A genuine company will always provide you a free, no-obligation quote before you actually sign up. You are recommended to request free quotes for debt consolidation loans from several companies and then compare their different offers. This way, it will be very easy for you to choose the best program. But again, in order to avoid unpleasant surprises in future (such as hidden expenses or hidden clauses), you must ask the company for a written agreement. Request them to allow you a couple of days to make a final decision. During this time, you must read all terms and conditions on the fine prints thoroughly. If there is anything you do not understand, such as any technical term, ask them for clarification. It is only after you are 100% satisfied that the program is affordable and very much in your favor and that there are no hidden catches at all that you should sign the agreement.

Never accept the first offer that comes your way right away no matter how lucrative it is. Your decision to go for a specific program must be based on the above-mentioned steps. If you follow these basic steps thoroughly, you will definitely be able to find out the best company for debt consolidation loans. If you are still not sure whether you should really go for any consolidation porogram at all, here are why you may like to consider it for your mounting payday loan debts.


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