What to watch out for

I think debt consolidation can be a good idea but there's a few things to watch out for.

1. Research the company before going with them. There's some shady "non-profit" business out there.

2. Keep a close eye on the fees. The debt consolidation company shouldn't be putting you further into debt.

3. Don't listen to the "lower your monthly payments". This just prolongs your debt. You're after lowering your interest rate, and applying as much as possible to the debt each month.

4. Do NOT put your house up as collateral. If you can not pay for whatever reason, you can now loose your home.

Debt consolidation companies make their money off of fees, so you're right about keeping your eye on them about that. If it'll help you in the long run, great! But if not, find another company.

I agree. Word of mouth is good referral basis here. Find someone who has gone with the company before. I always say these bigger companies only have their own best interest at heart so you really have to do your own research to get your backside covered.

you need to look out for one sign on all those offers they give out. look out for this sign ' * ' . if this sign is there above any word, then its a trap. read carefully at the bottom of the ad in this case .

Very good points. You should read the entire agreement very carefully, but read the * parts several times. :-) These companies make their money off the interest from the loans too. The fees are just bonus for them.

debt consolidation always come with a catch. It's up to the person to read the fine print.

Reading all the terms and conditions as well as company policies and also prevailing laws in the country can be helpful,.

[QUOTE=Jeremy;14]I think debt consolidation can be a good idea but there's a few things to watch out for.

1. Research the company before going with them. There's some shady "non-profit" business out there.

2. Keep a close eye on the fees. The debt consolidation company shouldn't be putting you further into debt.

3. Don't listen to the "lower your monthly payments". This just prolongs your debt. You're after lowering your interest rate, and applying as much as possible to the debt each month.

4. Do NOT put your house up as collateral. If you can not pay for whatever reason, you can now loose your home.[/QUOTE]


Good points and another thing to watch out for is what the companies future plans are. If they intend to merge with another bank or something else risky like that then back away from it straight away.

very good points, some company just for their own profits,they don't t think of you , so you shoud think twice befour doing.

I still think this is something you can do on your own. If you are not taking out a debt consolidation loan and are just negotiating with your creditors as a last ditch attempt to avoid bankruptcy you can call them and negotiate a plan yourself. If you explain to them that the only alternative is bankruptcy you will be surprised at how they are suddenly willing to help. Most of the non-profits are just making phone calls on your behalf.