There are several debt elimination solutions. Homeowners and persons with good credit have extra options. Nonetheless, several services and companies are available to assist people struggling with excessive debts. If opting to find relief through a debt consolidation service, it is important to know the qualifications for such services.
What are Debt Consolidation Services?
Debt consolidation services have one goal in mind – to help clients reduce their debts. For this reason, consolidation agencies work openly with creditors to negotiate better terms. This might include waived late fees, interest rate reduction, or the elimination of interest payments.
If creditors agree to new terms, you can expect to save up to 60% on monthly debt payments, and become debt free within two to seven years. Unfortunately, not everyone will qualify. Before applying, consider the following requirements.
Meet Minimum Debt Requirement
There are various debt management and credit counseling agencies intended to help people eliminate debt. Prior to contacting an agency, it helps to research the company. For the most part, most debt management companies have a minimum debt requirement. The average minimum is $4,000. However, some agencies require a minimum of $10,000. Individuals with smaller debt amounts may have to seek other debt reduction strategies.
Past Due Credit Accounts
While debt management and consolidation agencies seem like an easy fix to credit problems, most agencies will not assist individuals who are current on their credit payments. In fact, upon initial contact, a representative will inquire as to whether your accounts are at least 30 days past due.
Because their objective is to help people with credit and financial problems, these agencies will not usually offer help to persons who are able to manage their own debts.
Applying for Debt Consolidation
Applying for help through a debt consolidation service is simple. Most agencies offer online applications. Simply include personal information and lists debts to be consolidated. Once your information is reviewed, a representative will begin contacting creditors and create a repayment plan. If possible, choose a non-profit debt consolidation agency. This way, you avoid paying a one-time or monthly service fees.
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