Can anyone tell me about debt consolidation companies?

[angie1976]

I'm looking to consoldidate some debt but I'm not sure if it's a good idea to use a debt consolidation company.

Has anyone had experience with using one of these companies?

[TNShannon]

I tried using one of these several years ago, and though they did bring down the cost of my monthly payments, they also charged fees that seemed a bit steep. Since then I have learned that there are companies that charge a fee based on what you can actually afford, while others will charge a percentage of the entire balance you owe to all of your creditors. If they do the latter, you can find yourself facing a huge monthly payment to the company for "helping" you get out of debt.

The best thing to do is to compare. Be ruthless about it. Find out how they work, get a rundown of their rates, and go with the one that saves you the most money in the long run.

[MonicaS]

I think that debt consolidation companies are not the worst idea. They can really help to reduce your debts and to extend the repayment period. The fees are rather affordable for this service. I also used debt consolidation several years ago and it really helped to manage my payments.

[Barb]

Actually, you can do the same thing as a debt consolidation company. All you have to do is contact each creditor and explain your situation to them and work through their credit counselor. Each creditor wants to get their money back and when you go to a credit or debt consolidation company it cost the original creditor money as well. Most company's you own money would rather give you the discount than work with a professional collection company. Remember once you have made a repayment commitment to your creditor keep in touch with them at all times. Avoiding them is the worst thing you can do.

[Gabrielle Daae]

It is good to research and check what certain fees will be when it comes to debt consolidation companies.

[monni]

I have not had any experience with debt consolidation companies, but I have heard both good and negative things about them. First I would start off with doing what Barb posted, call you creditors and explain the situation. But one word of advice is not to wait until the last minute to do so, contact them ASAP. They will be more willing to work with you. Another thing if you have credit card debit call the bank that owns the card and ask about getting your interest rate reduced. But no matter what route you take, the best advice anyone can give you is do your research.