Debt Consolidation, Is a Third Party Needed?


Have you been thinking about Debt Consolidation? Have you looked for and tried ways to get out of debt? There is no shortage of agencies out there willing to help you out of your situation...for a price. But many of the things that they suggest can be done without their help.

I guess the most important question is do you need the intervention of a Debt Consolidation company?

Online and offline advertisement make you think that debt companies know more than you about solving your problem. We know that they have more experience helping others on a regular basis, but that doesn't necessarily mean that your situation warrants their assistance.

Review the following questions and determine if you need the assistance of a Debt Consolidation Company.

1) How much debt do you have? People with debt under $10,000 could negotiate with creditors to set up payment arrangements. As a consumer, you have the right to negotiate your interest rates on credit cards.

2) Will your credit score be affected? The true reason for managing debt is to avoid credit score issues. If a debt consolidation company informs the creditor that you are in a debt consolidation program, it could negatively affect your credit score.

3) What is the cost? You are trying to lower the outflow of cash. Many debt programs charge for their services and the price depends on the difficulty of the conusltation provided. They can provide counseling and suggestions without enrolling you in a debt consolidation program.

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4) Have you looked at ways to tighten your budget? Debt consolidation programs are about negotiating with creditors to find the best payment amount for you and them. If you could squeeze a little bit more money out of your Family budget this option may not be necessary. Consider expenses that you can cut out or reduce substantially. If you can negotiate payments yourself and come up with the money you may not need the services of a debt consolidation company.

5) Have you been through financial counseling? You may have trouble getting your spending out of control. Finacial counseling is the first step to financial freedom. Considering Debt consolidation without financial or credit counseling won't stop you from incuring future debt.

6 Are there other options? Your bank may be able to provide with a loan at a better interest rate in order to pay off your creditors because you are a valued customer. If you own your home a home equity loan can help pay off your debt and a credit counseling organization can help you stay debt free.

Debt consolidation isn't the only choice to clear up credit card and other debt situations. Before entering any agreements determine if you actually need a debt consolidation company.