Free Debt Consolidation Services – Are They Worth Their Value?

For many people, any service that is qualified as being free tends to draw an air of skepticism believing the service must not have much value tied to it. Interestingly, a free credit card debt relief program from any of the reputed free debt consolidation companies tends to be the exception to this rule. They are very effective by allowing people to help clear debts by taking one loan and use the money to pay off another loan.

As their name suggests, free debt consolidation services are debt consolidation programs available at no cost. Also known as non-profit debt consolidation programs, these services are one of the most highly recommended ways of getting relief from debts as soon as possible.

The basic principle behind the success of this free credit card debt relief program is pretty simple. People find it extremely easy and comfortable in paying single monthly debt payment rather than continuing with multiple payments. In case of free debt consolidation services, a single debt consolidation loan suffices this requirement. Free debt consolidation companies help in getting a debt consolidation loan with terms and conditions that are convenient to the borrower. Depending on whether or not the borrower is willing to pledge any property as security, debt consolidation loans can be broadly categorized into secured and unsecured loans.

part from this, companies providing free debt consolidation even undertake the responsibility of negotiating with the creditors or credit card companies on behalf of the borrowers and try to reduce their monthly payments and cut down interest rates to a considerable level so as to help clear debts easily and quickly. Also, these companies even prevent harassment from bill collectors. Depending on the renewed terms, the borrower pays the monthly debt payments to the debt consolidation service representative, which is in turn paid to the creditors or bill collectors. Some companies even try to mitigate late fees and other charges levied by the credit card companies. On a whole, they try to considerably reduce the credit card and other debt burden so that bankruptcy can be avoided and repayment becomes easier. In fact, these services can be considered as a boon for individuals with bad credit records and disastrous financial situation. Apart from helping in improving credit scores, these services also provide credit counseling and help individuals manage their finances without much hassle.

At present, there are a number of free debt consolidation companies operating in the market. Interestingly, only a fraction of them provide genuine debt relief services while others are just interested in making money. So, one must be prudent enough while choosing a right free debt consolidation company. Below are mentioned some useful points that can help in your selection.

1. Determine the actual amount of money that you owe in debts and the amount you can contribute towards debt clearance without getting into much financial trouble. For this, you can utilize the credit card debt calculator that is available on several websites.

2. Shop around and obtain quotes from multiple companies. For this, you need to furnish details such as your existing financial position, your income status and the amount of debts you hold. Have a discussion with the company representatives and determine the amount of debt you need to repay if you enroll in their service. Also, do remember to read and understand their terms and conditions.

3. Evaluate offers from different companies by making a comparative statement and select the one that suit your needs. Before selecting, do remember to track the previous record of the company either on the internet or by posting enquiries on the websites of Better Business Bureau (BBB) or other government agencies such as US Federal Trade Commission.

With this information in mind, it is easy to see why more and more people are opting for free debt consolidation services.