Posts Tagged ‘pay day loan debt consolidation’

5 Things You Must Do To Evaluate The Credibility Of A Pay Day Loan Debt Consolidation Company

It is not easy to put your faith in a pay day loan debt consolidation company because of the presence of so many unscrupulous companies out there. You are strongly recommended to do a thorough research and comparison-shopping before you decide to sign up with a specific firm. There are plenty of factors that you need to take into your careful consideration in order to ensure that the company you are signing up with can be trusted. Following are the five most important factors to work on.

Review The Overall Cost

The first thing you have to do is to review the overall cost thoroughly. These types of services do not come for free even if they are being offered by a non-profit organization. Some people assume that non-profit agencies do not charge anything, which is not true. It is very important for you to keep in mind that a legitimate and reputable pay day loan debt consolidation company never charges more than 10% of the total amount of outstanding debt. Read the fine prints thoroughly to ensure there are no hidden charges involved. Some companies charge a flat fee. Whatever is the case, the overall cost must be affordable to you. The main reason why you are looking out for these services is because you want to manage and pay off your debts easily, in an affordable manner. If the cost of the services is not affordable to you, it does not make any sense to sign up with such programs. Going for an expensive program will only mean pushing yourself into a deeper financial crisis.

How The Debt Payments Are Reported To The Credit Bureaus?

When it comes to choosing the best pay day loan debt consolidation company, the next big thing you have to look into is the way the company reports to the credit bureaus. When you try to settle debts through these types of programs, it often has negative impact on your credit score because of the way the debts payments are reported to the credit reporting agencies. There still can be a way to avoid this negative impact if you can convince your creditors to report about your debt payments to the three major credit bureaus as “debt paid in full”, not “debt paid in settlement” or “paid as per debt management program”. You must ask the consolidation company in advance if they are capable enough to convince your lenders for such reporting.

Qualification And Certification

In order to evaluate the credibility of a pay day loan debt consolidation company, you must also research how efficient and qualified its employees are. Are they duly certified by the International Association of Professional Debt Arbitrators (IAPDA)? This certification is a guarantee in itself that the professionals who are going to work for you are highly qualified with in-depth knowledge of the laws governing the debt consolidation industry.

Membership To The Local Chamber Of Commerce

A great way to ensure the fair conduct of a pay day loan debt consolidation company is to make sure that it is a member of the local Chamber of Commerce. In order to be on a safe side, you should also make sure that the local Chamber of Commerce the company is a member of is also an accredited member of the United States Chamber of Commerce.

Do A Thorough Background Check

The best company for you is obviously the one that has a very good past, with an impressive success record. Any company that fails to provide you information on demand is not right for you. The services must be quite transparent to avoid any unpleasant surprises in future. An easy way to check the past records of a company is to find out if it is affiliated with the Better Business Bureau or any other reputable pro-consumer group. The BBB and other such organizations maintain past records of companies affiliated with them. It means if there have been consumer complaints against a company, you can easily get informed about the same when you contact BBB and ask for details about it.

A thorough research work on the above five points will help you ensure that the pay day loan debt consolidation company you are signing up with is not only highly credible and reputable but is also the one with the best success record in these types of services. It will definitely take some time to do such an in-depth study, but it is worth spending that much time if you do not want to become a victim of scams.

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What are the pros and cons of debt consolidation?