Last year, the total U.S. consumer debt and the unemployment rate were the highest its been since 1948. With numbers like these, it can be easy to assume that paying off debt is a seemingly impossible venture.
Patience is a necessary virtue to possess when it comes to paying off your debt, and it can be difficult to maintain it when you’re dealing with something as frustrating as debt. That’s where a debt consolidation company can come in handy.
Not only can they help you put all your debt onto one loan, but they can also provide you with the necessary tools and education you need to get ahead of your finances. Read on to learn everything you should consider before hiring one.
Understand All Your Options
Before you commit to a debt consolidation company, it’s important to consider all of your options. These services aren’t usually free, and if you’re in a difficult financial spot then considering another option might be what’s best for you.
Research the Company You’re Considering
When you’re looking for a reliable debt consolidation company, it’s important to conduct plenty of research before you commit to a single one. All it often takes is a Google search to come up with and any necessary information you need. Here are a few things you should add to your list when researching:
- Reading online reviews
- How much experience do they have?
- What certifications and licenses do they have?
- How secure is their website?
- Is their website well designed?
- Does the company align with your interests?
Reading online reviews is important because it lets you know what others have experienced with a company. If its website only has a few positive reviews listed, then it’s best to do some looking outside of that. If you can’t find anything then it might be best to move on to a different company.
As far as looking into how much experience a company has and what its credentials look like, you can always ask over the phone or in person when you meet with them. A lot of claims any company makes are verifiable online.
And it might sound odd, but if a company has an ill-designed company or presents itself poorly online, that might be a red flag. Now, that isn’t the only thing you should rely on when you’re doing research, but it can speak volumes about a company in itself.
Is Your Preferred Solution Available at the Company?
Whether you’re wanting a firm that allows you to borrow and pay off your loan on your own terms or one that offers educational courses to help you through your journey, it’s important to ensure the firm you’re researching has the solution you’re looking for.
Firms like Plenti offer an array of services to help meet your every financial need, and they don’t make it complicated to get what you need to be debt-free.
How Are the Interest Rates?
To have a well-rounded picture of your situation it’s best to create a list of what it is you have to qualify and go from there. Here are a few questions to ask yourself and examine the answers to before you move forward:
- How’s your credit score?
- Do you have a cosigner?
- What repayment length are you looking for?
- What’s your ideal interest rate?
- How much are you looking to borrow?
While you might not have the credit score to qualify for a decent, low-interest loan on your own, having a cosigner with a high credit score can make all the difference.
Once you’ve answered these questions, it’s best to get online in order to start comparing interest rates for different loans and companies. It’s also good to know which companies specialize in the loan amount you’re looking for.
Some companies specialize in large loans (over $10,000) while others specialize in smaller loans ($5,000 and under). If you start looking for a large loan at a company that specializes in smaller ones, you’re either going to not find what you’re looking for, or you’ll come back with a loan that has a high interest rate.
What Kind of Debt Do You Have?
Another important thing to consider is the type of debt you have. For example, if you only have credit card debt, you might qualify for a balance transfer card that allows you to consolidate a few cards onto one. Those cards often also come with interest-free periods that last 12 months or longer.
However, if you’re trying to pay off a car or some other larger loan, then a balance transfer isn’t going to cut it.
Depending on the amount of debt you have, looking into secured versus unsecured loans can also make a large difference in what you qualify for.
No matter what kind of loan you go with, it’s important to find a company that’s willing to work with you to near your goals and get closer to the financial freedom you deserve.
When Do They Charge?
A lot of the time, a consolidation company will charge fees before they’ve even delivered results. To keep this from happening, make sure you look for companies that promise to not charge anything before results are delivered.
It’s also important to consider interest rates and how those affect your loan and your repayment options.
If you can’t find this policy online, don’t be afraid to call and get the answer yourself.
Do They Answer All Your Questions?
This goes back to you not being afraid to call and ask all the questions you need before making any decisions, but you also have to consider how they answer those questions.
Do they dance around the answers? Do they try to upsell a certain service even after you object? Are they clear and concise with any information they give you?
These answers matter. If you’re dealing with a company that isn’t clear with you from the beginning and they try to sell you things you simply don’t need, then helping you probably isn’t their number one priority.
However, if they communicate clearly and effectively from the beginning, and take everything you say into consideration before suggesting services, then you know that they have you in mind instead of money.
Do They Offer Courses?
When you’re searching for a firm to work with, it’s important to find one that not only helps you get out of debt but also gives you a chance to stay there. A lot of debt consolidation companies will offer educational courses in order to help you learn more about financial responsibility.
If you’re engaging in harmful financial practices, then it’s important to take advantage of any educational content you can. Doing this will equip you with the tools you need to stay ahead in the future.
Review the Debt Management Plan Before Committing
Finally, ask the company if you can review any plan they come up with before you commit to it.
You want to work with a professional that’s willing to be upfront about the services they’re charging you for, and it’s your responsibility to ensure they’re giving you everything you need to be successful.
A debt consolidation loan can only get you so far, and then it’s up to you to reach your goals. Ensuring that you have a plan that correlates with your personal goals is only going to make it easier to follow well into the future.
Benefits of a Debt Consolidation Company
The benefits that come with hiring a debt consolidation company can be endless if you go about it correctly. Here are a few things to consider if you’re still on the fence:
- Multiple payments can turn into a single payment
- Improve your credit score quickly
- Less overwhelm
- Professionals by your side every step of the way
- Lower interest rate
These benefits are huge if you go about your loan correctly, but it’s easy to fall into the trap of empty promises and false safety that can come with some debt consolidation companies if you’re not careful.
Luckily, these pitfalls are easy to avoid with a little ingenuity.
Ready to Make Debt Repayment Easier?
When you commit to a debt consolidation company, you’re committing to the idea of financial responsibility. You’re also giving yourself access to help whenever you need it and a plan that’s laid out simply for you to follow through with.
If you’re interested in learning about financial wellness, check out the rest of our website.