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Debt Consolidation Loan Service |
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What is a Credit Counseling Agency? |
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credit counseling agencies tend to be non-profit, but that doesn't mean
they are always free. Some may be funded by creditors. The credit counseling
agency is a go-between in dealing with your creditors. They negotiate reduced
rates, fees, and payments with your creditors. Creditors usually opt to
negotiate and grant concessions such as lower interest charges or lower
monthly payments rather than risk losing all payments if you were to file
for bankruptcy. You then make a payment to the credit counseling agency
along with the agency's fee and the agency takes care of disbursement at
the negotiated terms.
Usually the credit counseling agency will require that you do not apply for or use additional credit while in the program. A credit counseling agency while helping to perform some functions, such as distributing your single payment to the multiple creditors, is not an end-all solution. You are still responsible for your debts. You need to continue direct payment for debts outside the plan. You also need to make sure that your creditors in the plan are getting payment and that concessions are accurately reflected in your monthly statements. Accurate information may stay on your credit report for up to seven years. All repayments will also be reflected on your credit report. The report may indicate any write-offs, missed payments, or the fact that you are using a credit counseling agency. A credit counseling agency will have helped to set up a debt repayment plan. It is, however, just a plan and the only way out of debt will be to stick with the plan. It usually will take years. If you would like to be contacted by an agency, please visit our recommended
provider of debt management services. If you are going down the route of equity loan based consolidation rather than negotiate reduction, then make sure you know what to look out for in the lender. |
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