Financial Debt Consolidation - Loan Consolidation Frauds

Pay Off Debt Dues Faster. Low Interest Rates - that is the hype.

The fact is that actually the debt consolidation company profits from this one. They buy - yes buy - a lower interest rate from the company you owe money to by negotiating payment of thousands of dollars of debt. You are charged a rate for this facility and a monthly fee after that.

The debt consolidation company pays off your loan fast, you don't. You keep paying them instead.

If you thought making regular repayments by your due date was expensive, try making ONE LOW Payment every month.

These companies only buy bad debt to lower the interest. They will buy groups of debt - thousands of dollars of debt from an organization to get the lower interest rate - and in addition they get a percentage kickback from your loan company to reward themselves for payment of that debt.

Debt consolidation scam fees are included in your monthly payment - So in the real world you pay as much as you might have if you had sent that extra payment to your loan company and paid off your higher interest rate credit card faster by adding that extra fee to your payment each month. Actually, you pay a bit more.

They don't re-negotiate your due date. That means that they pay everyone's payment at the same time, once a month.

If they repay on the 15th of the month and your payment was due on the first, then your credit will get a 30-day late payment monthly - every month-on all three of your credit reports. Late payments stay on your credit history for 7 years (or more time). Feeling good now, I'll bet!

That's not over. You could also be one of those individuals whose payments get missed once in a while - Yes it takes place all the time with Debt Consolidation practices.

Negotiation is something you can do by yourself. If you just hate discussing to these people you can even authorize someone you know and trust to negotiate a lower interest rate for you on your advantage. If you can't get anywhere negotiating with the initial person you talk to, ask to talk to a manager. If you can't get anywhere by the third supervisor, you're stuck.

- Negotiate your own reduced Interest rate

- Stretch out your repayment schedule

- Pay off the maximum interest debts First and add more money

- Write 2 checks: One for the minimum payment and One for any additional money with a note in the memo that reads: "Principal Only Payment." This one simple measure can save you tons of money. If you don't state this, your money is automatically applied to the interest and you'll pay more interest for an extended period. Yeah, that really sucks, but not for them. For you.

- Figure out - there are cost-free debt calculators all over the web - what it would take to pay off your highest interest cards first. I plugged in my own and got up to the fact that if I add $60 a month to my minimum credit card repayment, I can have a $1300 debt cleared in 12 months with $66 interest.

- If I continue with the minimum payment, It can take more than 6 years and cost me over $2500. Just that one action that I took put over $1134 back in my purse - in one year. And I did it myself. Without debt consolidation fees!

I don't recommend any debt consolidation firm. They prey on your despair and the doom and gloom of the length of paying out your credit cards at minimum payments.

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