A Guide to Choosing the Best Debt Consolidation Company

When struggling to keep your debt under control, most people are tempted to find a fast and easy solution. If you are one of these people, you are more likely to come across different companies promoting debt consolidation loans. 

However, most of these companies promote a more controversial service in the name of consolidation payday loans—debt settlement. While debt settlement sounds very convincing, it comes to haunt you later in life. You should only consider debt settlement only after exhausting all the other alternatives. Debt settlement is costly, and it can seriously harm your credit score—and you will realize this when the damage is already done. 

With that, it’s important to be extra careful and to take your time when looking for a debt consolidation company. Please note that finding a reputable debt consolidation company will need you to do your homework. 

This shouldn’t discourage you, as the work that you do to find the right company will pay off in the future. And, although your ultimate decision depends on good decision-making and in-depth research, the following tips can help you find a reputable debt consolidation company. 

Let’s delve in!

Check with the Better Business Bureau

The Better Business Bureau or BBB is the best place to begin your search for a debt consolidation company. This is a resourceful website, where you check whether your prospective debt consolidation company has accreditation. 

In case the company has a rating, the Better Business Bureau will give it a rating. Besides, you have the chance to see if there are any complaints against that company on the BBB website. Also, it’s possible to know whether there are any legal actions filed against that company. 

Agency affiliations

Does your prospective debt consolidation company have any agency affiliations? A reliable debt consolidation company should be registered with professional industry affiliations like the National Foundation of Credit Counseling or the Financial Counseling Association of America. Now, in case your company is registered with any of these affiliations, you should consider shortlisting it. 

Does the company have non-profit status?

There are some amazing non-profit debt consolidation companies out there. However, it’s important to take your time to research a company that claims to have a non-profit status. In case the company has such a status, it should have a certificate. 

However, if you request for a certificate of proof and the company is hesitant or unable to show it, that’s a red flag. Reputable non-profit debt consolidation companies shouldn’t have any challenge in showing their credentials. 

Be cautious of organizations purporting to have religious associations

Some debt consolidation companies claim to have religious affiliations just to attract clients. These companies do this with one aim—building trust and making clients feel free to do business with them, thanks to the shared religious beliefs. However, most of these companies are not genuine with their religious beliefs. 

The best thing to do in this case is to look for a debt consolidation company, like federatedfinancial.com which holds up to research and scrutiny. Besides, your preferred company should provide a solution that meets your needs. By comparing the interest rate and all other costs involved, you should be able to make an informed decision. 

Potential pitfalls to watch out for

When looking for a debt consolidation company, it’s important to ask some essential questions before signing the deal. Besides, you shouldn’t sign any deal if you don’t feel comfortable with the answer provided. With that said, it’s important to watch out for these red flags when looking for a debt consolidation company. 

The bait and switch tactic

Some debt consolidation companies attract prospective clients by advertising debt consolidation products and then transfer them to another product after making contact. This is what we call the bait and switch tactic. Therefore, you need to pay extra attention to the details provided, and then ask questions until your doubts are cleared. Always remember that debt consolidation is a pretty simple process—you combine all your debts into a single loan, where you will be making one monthly payment. If a creditor is suggesting something different, just look for another one. 

The quick and easy pitch

One thing you must understand is that there aren’t quick answers to solving any debt problem. If a payday consolidation loans company makes it look like they have a quick and easy solution to your debt, there’s a possibility that they don’t have your best interest at heart. If a deal sounds too good, think twice. Here, you need to trust your gut. If you feel uncomfortable with the pitch, it’s a sign that something is amiss. 

The quick closing

There’s no convenient solution to your debt problem. So, if a lender is asking you to get registered immediately, it is a big warning sign. Always take your time to consult with different companies before making your decision. Also, you should avoid companies that pressure or rush you to make a decision.