At this point, you proabably have many questions about debt consolidation. Find the answers to the most frequently asked questions about debt relief below.
Debt relief can mean many things, but, in this context, we use it synonymously with debt consolidation. Debt consolidation provides debt relief to participants by negotiating their interest rates and combining multiple debts to make escaping from debt a more viable, affordable, and convenient undertaking. Because of the new interest rates, debt consolidation customers are also able to enjoy substantially more affordable monthly payments.
You certainly can attempt to formulate your own debt relief plan, and, in some cases, it does work. However, if you have excessively high interest rates and a substantial amount of credit card debt, usually no amount of self-help can significantly ameliorate such a difficult situation. For this reason, you're better off paying the small fee to a consolidation service in exchange for the negotiated interest rates that they can pass on to you. The interest rate changes alone are worth the price for most customers, not to mention the convenience of only having one creditor to pay each month.
Yes, debt relief can make your credit card interest rates much more affordable. In fact, the average consolidation customer enjoys interest rates ranging from 0%-8%, a vast improvement from the average credit card interest rates in the mid to high teens.
The time it takes to pay off your debt will of course depend on the amount of debt you have and the interest rates your consolidation service is able to negotiate on your behalf. On average, consolidation customers become debt free in four to eight years. By contrast, most Americans take decades to pay off their credit card debt in full.
Debt relief is extremely affordable and well worth the thousands of dollars in savings it can provide. The fee for services will of course vary by company, but most consolidation firms charge a commission fee that you pay up front and a monthly service fee. Traditionally, the commission is the amount of your new monthly payment. The monthly service fee can range from $10-$40 and may be a flat fee or a per-creditor fee.
No, debt relief does not have a deleterious effect on your credit score. On the contrary, many debt consolidation participants see a jump in their credit score over time as they make significant strides to paying down their total outstanding debt. Similarly, because your bills are always paid on time, you will avoid any further damage to your credit from late payments.
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