Facts about debt consolidation programs: What consumers must know

When you're unable to manage multiple debt payments on time, you can consider enrolling in a debt consolidation program. By enrolling in such a program, you can combine all your unsecured debts into a reduced single monthly payment and get rid of them soon.

What types of debts can you consolidate?

With the help from a debt relief company, you can consolidate all your debts that are not secured by a property or asset. Some of the types of bills you can consolidate are:

1. Medical bills
2. Credit card debts
3. Utility bills
4. Personal loans 
5. Charge cards

How can you benefit by enrolling in a debt consolidation program?

When you enroll in a debt consolidation program, a counselor of the relief company analyzes your financial situation and assess your total outstanding debts. A consolidation program offers various benefits. Some of these are:

Communicates with your creditors: A representative of the company communicates with all your creditors and so they may stop harassing you with calls for payment. 

• Communicates with your creditors: A representative of the company communicates with all your creditors and so they may stop harassing you with calls for payment.

• Lowers the interest rate on debts: The representative negotiates with your creditors and helps you lower the rate of interest on your bills. You can also get rid of late fees and over limit charges by enrolling in a consolidation program.

• Single payment replaces multiple payments: The debt relief company prepares a repayment plan and gets it approved by your creditors. Instead of making multiple payments each month, you have to make a single monthly payment to the company and they will disburse it to all your creditors. 
   

How much does a consolidation program cost?

When you enroll in a debt consolidation program, the relief company will charge you an upfront fee and monthly fees. The fees are not very high and can comfortable fit into your budget. However, you must remember that there are certain fraudulent companies that may scam you to pay high fees. So, when you're enrolling in a consolidation program, you must ask the company about the fees you have to pay and also verify the company's service background and accreditations. By paying your creditors on time with the help of a reliable relief company, you can pay off debts within a few years.