Debt Consolidation Services – 3 Things To Watch Out For With Debt Consolidation Companies
Debt consolidation services can provide a valuable service by lowering your interest rate with creditors, enabling you to pay off your unsecured loans and bills in a short period. However, there are companies that would rather take your money than help you. To avoid such scams, watch out for the following.
Low Monthly Payment Claims
While debt consolidation companies can lower your interest rate which might lower your payments, they cannot negotiate lower minimum payments. Creditors no longer accept smaller payments since 2004, not even for hardship cases.
One trick companies use is to lure customers in with a low quote, only to jack up the required payment in a months time. By that time you have already paid out fees, which arent refundable.
Upfront Fees
Another shady practice is to charge large upfront fees when a company is claiming non-profit status. Legitimate companies will either charge a small monthly fee between $14 to $69, depending on the number of accounts. The other fee structure is to charge a reasonable fee for each account...
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