Debt consolidation program - Reduce rates and consolidate payments

If you're finding it hard to manage your bills, a debt consolidation program (or bill consolidation) can work in your favor. The purpose of this program is to help you meet your monthly payments and get you out of debt.
How do debt consolidation programs work?

Consolidation programs work in a way such that you can reduce your monthly payments and have any late fees/extra charges waived off or eliminated. Given below are the 6 steps in a consolidation program.
Step 1: Go for no-obligation free debt counseling

Contact a debt relief company and attend a free counseling session with their consultant. The consultant analyzes your financial situation and completes an income and expenditure review in order to find out how much you can pay towards your monthly bills.

After signing up you can
Debt Consolidation Care orange arrow Get free debt advice
Debt Consolidation Care orange arrow Reduce interest rates
Debt Consolidation Care orange arrow Pay off debts fast
Debt Consolidation Care orange arrow Avoid collection calls
Debt Consolidation Care orange arrow Get credit card consolidation
Debt Consolidation Care orange arrow Consolidate payday loans
Debt Consolidation Care orange arrow Avoid bankruptcy
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Step 2: Enroll yourself in a debt consolidation program

If the consultant finds that a consolidation program is the most appropriate solution for you, he will send in the required documents for you to sign. The consultant will also provide you with details on the fees required and an authority form which will allow him to talk to your creditors on your behalf.
Step 3: Consultant starts handling creditor calls

When you receive documents, the consultant contacts you in order to resolve your queries before you sign the docs. This is when you can start referring creditor calls to the consultant who speaks on your behalf.
Step 4: Consultant negotiates on your behalf

The consultant gets the details of outstanding balances on each debt account you have. This helps him to do a complete Income and Expenditure analysis. This is then sent to your creditors with the proposal for a payment plan you can afford.

The debt consultant then works with your creditors/collection agency in order to reduce your interest rates and hence monthly payments. He'll also request creditors to freeze or reduce extra charges and late fees on your accounts so that you don't have to pay more.
Step 5: You send in monthly payment to the company

Your monthly payment should be sent to the consolidation company which then distributes it amongst your creditors/collection agency. So, multiple bills are actually consolidated into a single monthly payment. Thus, you don't have to worry about handling several creditors at a time.
Step 6: Your creditors receive the payment

Within a few days of receiving your payment, the company forwards it to your creditors. You are likely to receive creditor statements as a confirmation of receipt of your payment.

Generally, the consultant takes an update of your financial situation after every 6 months or so. If in case your situation changes, you should inform the consultant about it. The consultant will review your situation and then request your creditors for a different payment plan if required. He will also help you with budgeting and money management tips so that you can organize your finances effectively.

For further information on "how do debt consolidation programs work", browse through the "Debt Consolidation" section in debt management faq page.
How does debt consolidation program help you?
The program offers the following benefits:

1. Low monthly payment due to reduction in rates.
2. You may not have to pay late fees/extra charges.
3. You can avoid harassing collection calls.
4. Different bills are consolidated into one easy payment.
5. Get rid of dues in 4-6 years as compared to an average of 20-40 years.
6. Positive impact on your credit.

What fees do you need to pay?
There are 2 types of fees involved in debt consolidation programs.

* One time representation fee: The consolidation company charges this fee for communicating verbally and in writing with the creditors/collection agencies.
* Monthly representation fee: This is required on a monthly basis for the services offered in handling your monthly payments and distributing them to your creditors

How do you choose the best debt consolidation program?

In order to choose the best debt consolidation program, you need to prepare a list of consolidation companies in your area. Then collect the following information about them:

1. How long has the company been in business?
2. Does the company have good reputation?
3. Is it listed with the BBB?
4. What are its accreditations?


After you've gathered the details, follow the steps given below:

1. Research online and read reviews about the companies.
2. Ask for client testimonials when you approach them.
3. Check the company records available on the BBB website.
4. Ask for referrals from your friends and relatives.
5. Go for a free consultation and take the details about their programs, fees etc.
6. See if they are interested to work with you on their fees and payment schedules.


Compare the companies and programs on the basis of the details you've collected. Only then it is possible to find out the best debt consolidation program for you.
What are the don'ts in a consolidation program?
Check out the don'ts and avoid them when you're in a bill consolidation program.

* Don't miss a payment or make a late payment.
* Avoid making major purchases while you're in the program.
* Don't take out any more credit while you're in a bill consolidation program.
* Avoid charging up credit cards close to or above the credit limit.
* Don't make any balance transfer while you're on the program.

It gets easier to pay if you consolidate multiple bills into a single payment. This is what debt consolidation program does for you. So, if you're looking to reduce your monthly bills and combine them into one easy payment, enroll yourself in a consolidation program and get out of debt in a comparatively short time frame.