The Truth About Free Credit Counseling Services
Posted by admin on March 11th, 2009 filed in Debt Consolidation
There are a lot of questions being asked about free credit counseling services, but do they really exist. There is a lot of free information available today on how to manage your credit. But as far as getting debt consolidation for free, it is probably not going to happen. Many credit counseling agencies advertise their services as being nonprofit, and there is a difference between nonprofit and free. These companies are a business and they still have expenses to pay.
A reliable credit counseling company will charge a small setup fee. Most debt management companies will also charge a small monthly fee, and it should be no more than $50. Now to some of this may seem like a lot, but if you look at what you are paying in interest each month, it is of a small price to pay. Credit counseling companies help you pay your debt off by reducing your interest rates and eliminating you monthly fees. Most interest rates will range from zero to 10%. For some people this means a reduction of as much as 20% in interest each month. This reduction can save you hundreds of dollars and possibly even thousands of dollars over the life of the repayment period.
When selecting a credit counseling company the one thing you want to be aware of are large upfront fees. Some credit counseling companies will try to hold the first month’s payment back. When I first researched counseling companies, I talked to two or three that all had this practice and was very surprised when the fourth one advised me that there was no reason for a company told this money back. All payments made should go directly to your lenders. You’ll make your payments to the credit counseling company and they will disburse the payment to your lenders. Many credit counseling companies will require an electronic payment. This makes it easy. All you have to do is make the money available and the service will do the rest.
If you’re only making minimum payments on your credit card accounts and feel like it’s a struggle or you have a large amount of debt and feel like you will be making credit card payments forever, credit counseling is an option that can help get free with little or no impact to your credit. For most people it takes five to seven years to complete the program. That may sound like a long time, but it is shorter than making minimum payments for 20 or 30 years. It is also less expensive.
Are you looking for free credit counseling services? Are you tired of the stress of being in debt? Find out more about how to reduce credit card debt.