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Types of Debt Consolidation Company Reviews

Types of Debt Consolidation Company Reviews
Daniel Cohen
UpdatedNov 25, 2022
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    3 min read
Key Takeaways:
  • Most debt consolidation companies reviews appear online.
  • The BBB, the most well-known rater of business has a suspect reputation.
  • Use comparison shopping, to find the best debt solution.

Are Online Reviews Helpful, When Choosing a Debt Consolidation Company?

If your credit card debt is causing you problems, it is worth considering debt consolidation as a solution. To choose the best debt consolidation provider, make sure to read debt consolidation companies reviews. The best place to find them these days is online, including the debt consolidation company reviews that you can find at Bills.com.

BBB

The Better Business Bureau is probably the best known rating service. The BBB gives a letter grade, but not a detailed review, of various debt consolidation companies. It would not be surprising if you checked the BBB rating, before choosing a debt consolidation company, but it is important that you know The BBB has come been criticized for using a "pay for play" system, where businesses that pay the BBB membership fee get higher ratings.

ABC News did a detailed investigation in 2010 that included damning criticism from then Connecticut Attorney General Richard Blumenthal (now a US Senator) Blumenthal said that the BBB "is unworthy of consumer trust or confidence." (For the record, Bills.com has an "A+" rating with the BBB.)

Another point against the BBB is that it does not seem to judge the number of customers a business serves, compared to the complaints it receives. Therefore, some large companies get a bad rating due to a "high number" of complaints, even though they have less complaints per customer than companies that receive higher ratings.

Quick tip

Contact one of Bills.com's pre-screened debt providers for a free, debt resolution quote.

Kinds of Debt Consolidation

When you're shopping for a debt consolidation company, it is also very important to be aware that "debt consolidation" is used to describe a few different methods of dealing with debt. The main debt consolidation options that are available are:

  1. Debt Consolidation Loans- There are two main forms of taking out loans to consolidate your debt.
    • Cash-out mortgage debt consolidation-If you own a home with a significant amount of equity, have good credit and income, take out a debt consolidation mortgage. You can read mortgage debt consolidation company reviews at Bills.com.
    • Unsecured personal loan debt consolidation- You can shop for an unsecured consolidation loan at major banks and credit unions. A personal loan consolidation only makes sense if it lowers your interest rate. For this kind of product, reviews are not crucial. Instead, focus on the price and the terms.
  2. Alternative Debt Consolidation Programs- In addition to loans that consolidate your debt, you can work with a debt consolidator that focuses on getting you out of debt at a lower cost. You can read debt consolidation companies reviews at Bills.com and at other sites online. Online review sites often draw more complainers than those offering praise, so keep that in mind when you read the reviews.
    • Credit Counseling Program's Debt Management Plan- A debt management plan is a form of debt consolidation where your payments are consolidated, while your interest rates are lowered.
    • Debt Settlement- Debt settlement also consolidates your payment, but your monthly payment is put into a bank account that is used to resolve your debts for less than you owe.

Reviews are Part of the Picture

Anyone looking for debt consolidation help should certainly look at reviews, but that should not be the most important factor in choosing the right company to work with.

Comparison shopping is the best way to weigh different debt consolidation approaches against each other and to compare different debt consolidation companies that offer the same service. When you speak to any company, try to ask the same questions, so you can make a fair comparison.

Debt statistics

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Auto loan debt was $1.50 trillion and credit card was $0.89 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Mississippi, 17% have student loan debt. Of those holding student loan debt, 11% are in default. Auto/retail loan delinquency rate is 8%.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.

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