- 4 min read
Reading Debt Consolidation Reviews are an Important Part of Finding the Right Debt Solution
There are many different types of debt consolidation. Your first task is to find the option that fits your situation. After you figure out what kind of debt consolidation is best, then you should focus on finding the right company to help you.
Why Are You Consolidating?
Are you looking to consolidate debt to resolve a serious debt problem? If so, you'll want to look at professional consolidation options like credit counseling or debt settlement. Your range of choices are different if you have good income, strong credit, and valuable assets, but are carrying some debt that you want to consolidate at a lower interest rate.
Make a budget to analyze your cash flow. Determine how much money you have available each month to put towards paying down your debt.
If you have:
- Equity in your home and good credit, look at a cash-out refinance to consolidate debt.
- Strong credit and no assets, look at an unsecured debt consolidation loan from a bank, credit union, or peer-to-peer lender.
- Bad credit or are struggling to make your required monthly minimum payments, look at getting help from a debt resolution professional.
Once you decide what type of company you want to work with, then you need to find the right company to help you. You may do a lot of your research online. There is a lot of information online, but you have to be smart about sifting through everything to find information on which you can rely. Take the proper time to be thorough in your research.
Look at the accreditation of any firm you consider hiring. Accreditation is a sign that a company meets the standards for quality established by an agency or organization.
Accreditation does not guarantee that you will get excellent service or be treated properly, but it is a strong indication that a company follows certain guidelines and practices.
Credit Counseling (CCC): Look for credit counseling providers that are part of The National Foundation for Credit Counseling (NFCC). The NFCC requires that its members receive are regularly audited for their financial practices and stability, as well as provide clear and full disclosures.
Debt Settlement Companies: American Fair Credit Council (AFCC) accreditation is a sign that the debt settlement provider charges no advance fees. AFCC accredited firms adhere to the AFCC's strict code of conduct, including full compliance will all laws and regulations as well as making full and transparent disclosure to customers..
Lenders: Banks, credit unions are heavily regulated, whether they make an unsecured or secured debt consolidation loan. Other lenders that make mortgage loans are heavily regulated, too.
Where you need to be most careful is when you borrow money from a payday lender or online lender that specializes in loans for people with bad credit. Before taking out these kind of loans, check whether the lender is licensed to make loans in your state. Contact your state lending regulator to see if it publishes a list of compliant lenders. You can find a list of each state's lending regulator on this page.
Online Debt Consolidation Reviews
There are different sites online where you can read debt consolidation reviews.
Bills.com publishes reviews that include general information about the company, a Bills.com review, and customer reviews.
The Better Business Bureau is well-known site that gives a letter grade rating to companies. Use the BBB as a guideline, but don't use it as a sole reason for judging a firm. (Bills.com has an A+ rating, so this advice is not based on dissatisfaction with our BBB grade). View the number of complaints against any firm and compare it to their total number of customers. A firm with 20 complaints in the last year could have a lower percentage of complaining customers than a firm with 2 complaints.
Word of Mouth
Recommendations from family and friends are very useful. A recommendation from someone whom you trust carries a lot of weight. Don't hesitate to ask anyone you know who has consolidated debt how things worked for them and how happy they were with the company they chose.
Bills Action Plan
The best review is the one you do yourself. There is no one place where you can find all the information you need to make the best debt consolidation decision.
To find the right debt consolidation company to work with:
- Figure out why you need to consolidate debt.
- Review all your debt consolidation options.
- Read debt consolidation reviews online.
- Seek personal recommendations from family and friends.
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q2 2022 was $16.15 trillion. Student loan debt was $1.59 trillion and credit card debt was $0.89 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in Michigan, 26% have any kind of debt in collections and the median debt in collections is $1374. Medical debt is common and 13% have that in collections. The median medical debt in collections is $440.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.