Posts Tagged ‘pay day loan consolidators’

45 Questions You Must Ask Before Signing Up With Pay Day Loan Consolidators

There are many pay day loan consolidators in the market who offer different types of debt relief programs to help those consumers who are badly trapped into the viscous cycle of debt created by short-term cash advances borrowed from payday lenders. If your debt situation is out of control and you are hopeless about getting your finances back on track, you can consider using the programs offered by debt consolidators. However, like with anything, you must first spend some time to do a thorough research and background check before you sign up with any such program. Following is a list of forty five questions that you must ask and get clear answers to before you commit to a pay day debt consolidation company.

The Kind Of Services They Are Offering And How Much It Costs

1. Do they require you to sign up for several additional services? Do they get commission for that? You should stay away from those pay day loan consolidators that make money by multiplying debt troubles or financial obligations of the consumers.

2. How immediately they are going to start working on your case?

3. Are they going to appoint any credit counselor to look after your specific case? How much the counselor is paid?

4. Do they require you to sign a formal contract or agreement in writing? If no, do not sign up with them. Never fall for verbal assurances or promises no matter how lucrative they sound to be.

5. Do they require you to pay additionally for any “extra” item, such as for credit reports?

6. Enquire about their sources of funding. You should even ask them to show documents in support of their claims.

7. Some pay day loan consolidators advertise their services by claiming to be non-profit organizations. Ask them what does the “non-profit” tag actually mean and how does it benefit you?

8. Enquire about their fees. How do they figure the fees? Some people have the misconception that non-profit agencies do not charge any fee, which is not true. So, even if you are contacting a non-profit debt consolidator, do not forget to ask them to explain their fees and charges.

9. Do they charge any set-up or processing fees?

10. Do they charge their fees on a monthly basis?

11. Some unscrupulous organizations keep the first few installments (that you pay to them as part of the plan you sign up with) as their fee. It means your creditors get no payments at all for the first couple of months. Such practices are obviously quite unfair and dangerous. So, make sure you clearly understand how they charge their fee, how often you are required to pay, how much, and in what mode? Never give them access to your bank account, such as a direct debit authorization; such things are likely to put you into a deeper trouble.

12. Are the fees fixed or flexible? Read the fine prints thoroughly about it. Some unscrupulous pay day loan consolidators try to attract consumers by offering low fees and charges, but they increase the charges on several grounds at a later stage after the consumer signs up with one of their programs. Make sure that there is a clear provision in the contract that the fees cannot be hiked in any case after you enroll in a program.

13. Are they going to help you with your immediate problems only? Or, they will also help you with your finances to avoid future debt problems?

14. Do they have any official website, where you can get more information about them and access their learning materials?

15. Do they offer any teaching materials, such as to educate the consumers about the payday loan laws applicable in different states? Are those teaching materials easily accessible for free?

16. Do they have any checklists or educational materials to help you prepare on how to deal with payday loan debt problems?

17. Do they charge their fee in advance?

18. Ask them for a complete and clear list of services they offer. Make sure you very well know which specific program you are signing up for and what kind of services that program includes.

Qualifications And Training Of The Debt Management Experts

19. Most pay day loan consolidators appoint a debt consolidation expert to handle your case. You must ask questions about the qualifications, experience, and training of the financial expert who is going to work with you.

20. Ask them if the company and its employees meet the state and professional standards to offer such services.

21. Is the agency duly licensed to offer such programs in your state?

22. What is their success record? Ask them to show documents in support of their claims.

23. Is a single debt relief expert will work with you or is it going to be a team effort?

24. Ask them to provide you a list of their previous clients who they have helped successfully in getting out of the payday debt hell.

25. How long the company or the agency has been in this business?

26. Does any independent firm audit the agency?

27. Who issues license to them? Who regulates them?

28. Are they members of any business association?

29. Do they keep the information provided by you confidential? How do they guarantee this? What is their privacy policy? Is there any written confidentiality and non-disclosure agreement in place?

About The Process

30. Are the pay day loan consolidators going to convince the creditors to waive off late fees and other financial charges?

31. Will they convince the lenders to reduce interest rates?

32. Will further charges be automatically stopped once you start making the repayment as per the proposed plan?

33. Will the collection calls stop after you sign up for a specific debt repayment plan?

34. What if your creditors do not agree to work with debt consolidation experts?

35. Is your account information accessible online to you?

36. How are you going to find out if your creditors are being paid in a timely manner?

37. What kind of plans do they offer? Does a debt repayment plan work differently from a credit counseling program? Or, does the debt repayment plan include basic services like credit counseling?

38. How much minimum outstanding balance you must have on your debts in order to qualify for a specific payday loan debt consolidation program? What are the qualifying criteria?

39. What if the single consolidated payment you are supposed to pay every month, as part of the plan, is not affordable for you? How are they going to help you make it affordable?

40. What if you are again hit with some emergencies and end up missing some monthly payments? How is the agency going to deal with such situation? What will be the consequences?

Other Questions

41. Will the pay day loan consolidators also help you with the repayment of other types of debts?

42. Do they have any exceptions? Are there any types of payday debts that they do not include in their programs?

43. How the debt repayment will be reported to the major credit bureaus if you start making the payments as per the program they are offering?

44. How will the debt repayment plan affect your credit score? Will it affect it negatively or positively?

45. What does the company do to protect your credit worthiness?

Last, but not the least, you must also ask the pay day loan consolidators if there is anything else they would like you to know about.


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