Avoiding Predatory Debt Consolidation Programs

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Debt consolidation is a pretty simple concept when you break it down into its basic parts. Essentially, it does exactly what’s implied by the name: consolidate debts. This means your various lines of credit can be combined into one new loan.

There are a few distinct advantages to debt consolidation. First of all, it’s always nicer to have one loan as opposed to many. Only having to think about paying back one account vastly simplifies the whole process. Beyond that, it’s often true that consolidating debt will lower your net interest payment.

Unsecured loans often come with high-interest rates due to the fact they aren’t backed by collateral. Consolidating can help you lessen the burden of higher interest rate accounts.

There are several ways people can approach debt consolidation. Those with an abundance of credit card debt might want to consider a credit card balance transfer. This comes with a perk of a low introductory interest rate — often zero percent for the first 18 months. Taking advantage of this can help you quickly pay down your debt while accumulating no more interest.

However, your financial flexibility will be more limited if you have a lower credit score. In this instance, you’ll need to be especially careful to avoid scams and predatory actors.

Why Look Out For Predatory Programs?

Everyone wants to believe other people have good intentions. But this is unfortunately not always the case, especially when it comes to financial matters. Money attracts greed; and people in desperate financial situations attract those who would take advantage of them.

People working through a serious debt issue want solutions. No one wants to have such a dark cloud hanging over his or her head. Scammers know this and intentionally target those who are struggling with their finances. People looking for legitimate debt consolidation services should consider Bills.com debt consolidation experts. You’ll be sure to get valid information from trusted parties with them.

The Warning Signs of Predatory Debt Consolidation 

There are a few things that are always red flags when it comes to debt consolidation and debt relief in general. It’s essential you know these warning signs so you don’t fall victim to a debt consolidation scam. These are some things to keep on your mind:

  • You’re contacted without requesting information –If an organization reaches out to you about consolidation services without you contacting them first, this is a big sign something mightn’t be quite right.
  • The company isn’t giving you enough information – Vagueness is never a good thing when it comes to your finances. You want clear answers so you can make informed decisions. Don’t trust a company that can’t do this.
  • They guarantee you’ll succeed with consolidation – There’s absolutely no guarantee of success when you’re consolidating debt. Avoid any organization that tries to make you promises in this way.
  • They ask for payment before services have been provided – When it comes to debt consolidation, you might have to pay a fee to transfer balances or to originate a loan. There’s nothing else you should be paying for upfront when it comes to consolidating debt. Any organization that says they’re helping you with consolidation, asking for money before it’s been done probably isn’t legitimate.

Debt consolidation can be a great way to get your finances under control. But it’s important to avoid getting tied up with a predatory organization.

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