Free Debt Consolidation

For many people, credit counseling and debt consolidation is the best option to manage their loans efficiently. But is it for everyone? You may be looking at your list of credit card loans, investment premiums, mortgages and other payments. You may be thinking –and many consolidation companies will tell you—that signing up will be the solution.

Before you do commit, see if you truly qualify for a credit counseling and debt consolidation program:

1. You are unemployed with no emergency fund to support your daily needs and pay off your loans. Even if you have a job coming your way in a month or so, it will take some time before you start earning significantly to pay off your loans.

   At the moment, you do not have any available cash whatsoever. Chances are that you are using your credit card but this means incurring more debt. In the meantime, late payment fees on your debt are piling up

   In this case, there are many non profit debt consolidation programs that will help you survive the rut of being in between jobs. These not-for-profit consolidation groups understand your case and offer free initial counseling. They also tend to have smaller start-up fees, some of which may gradually increase as soon as you gain better financial stability.

2. You are now using credit cards to meet daily expenses and unable to pay the monthly statement. It is also most likely that you are close to maxing out the credit limit. This is a sign that you do not have an emergency fund or have already used it up.

   A professional credit counseling and debt consolidation firm can help you manage the credit card loans efficiently based on how much you are earning. Good counselors will assess first your financial status and then find ways to wean you from more credit card purchases. They will also negotiate with the credit card company on your behalf for an easier payment schedule or lower fees.

3. You are up-to-date in meeting the minimum monthly payments but are barely making a dent in relieving the balance. This scenario shows how big the principal debt has become and how the interest rates have grown with it. A little number crunching may reveal that the monthly payments have only covered the interest rate, and not the loan itself.

   Again, credit counseling and debt consolidation services include having counselors talking to those companies you owe for friendlier terms. You need this feature in case you feel you are short on negotiation skills or simply do not have the time to go through all your creditors. Note that for-profit and non profit debt consolidation programs will have slightly different terms and ways of negotiating.

Going to a debt consolidator seems to be the fastest and easiest way to manage your loans and to keep those pesky call center agents from calling you every hour. However, you should first ask if you are able to handle this yourself. All consolidation programs, including non profit debt consolidation programs, will charge a fee. You need to decide if your financial situation will take advantage of all the services they offer.

For more information about credit counseling and debt consolidation please visit: non profit debt consolidation programs