If you want a consolidated debt that you can afford to pay, you may want to consider a debt consolidation company that can guide you through the consolidation process and can help you make the right decisions for your financial life.
There are several types of debt consolidating companies: • Debt consolidating companies who consolidate debt payments, not debts.
Rather than offering you a consolidated debt through a loan, these companies consolidate your bills.
They negotiate with your creditors to get better rates and terms.
Then, you pay the credit consolidation company each month.
The company uses this money to repay your creditors.
You enjoy lowered monthly bills and lower interest rates.
Plus, the consolidation company will in many cases work with you regularly to ensure that your debts are paid off fast.
• Lenders: These debt consolidation companies provide you with loans that you can use to repay your debts.
Then, you only need to pay off one low-interest debt at a lower rate and with better terms.
• Non-profit and Profit debt consolidation companies.
Non-profit debt consolidation companies allow creditors to take advantage of corporate tax laws.
Since the company is a "non-profit" a creditor working with the company will be able to recoup some lost interest as a tax write-off.
For example, if you owe a company $200 and the company, through a non-profit credit counseling company, forgives you the interest on the loan, the creditor can claim the loss, in many cases, on their taxes, allowing them to get the money back.
For-profit companies do not have this advantage but some debtors prefer them because they tend to be larger companies with many professionals working for them.
Whichever type of debt consolidation company you decide to select, make sure that you understand the different between companies.