What Are Different Types Of Credit Consolidation Agencies?

There are times when credit consolidation agencies can help you get back on your feet and begin the road to taking control of your finances. Credit consolidation agencies offer ways for consumers to reschedule payments for many different types of loans and offer payment plans that are easier to handle for most consumers. There are many types of debt consolidation agencies that provide many different types of consolidation service consolidation services.

Payday Loan Consolidation

There are some debt consolidation agencies that offer payday loan consolidation loans. Many times, when people start taking out payday loans, they find themselves in a vicious cycle of traveling from one payday loan lender to another simply to pay off a payday loan that was previously taken out. Payday loans usually charge very high rates of interest, and can be difficult to escape unless alternative payment schedule arrangements are not reached. Therefore, a payday loan consolidation offers the lender a longer payment schedule and also tends to reduce the rates of interest that are charged by the lenders. Most of the time, consolidation agencies will be much better equipped to handle these type of negotiations than you would be on your own.

Debt Management Consolidation

Agencies that offer debt management consolidation services usually help consumers take control of their financing finances by negotiating with creditors to lower payments and interest rates for most types of unsecured loans. Generally speaking, debt management consolidation services allow you to make one single payment that is distributed among all of your creditors. You make your payments directly to the debt management service and the service pays the creditors on your behalf. These programs are designed to help you get out of debt in a specified number of months and also help you reduce interest rates and help free up additional cash for everyday living expenses.

Debt Consolidation Loan Agencies

In addition, there are lenders that will make loans available for you to pay off many types of credit card balances or other unsecured loans. While these types of loans generally involve somewhat high interest rates, they do offer you the ability to get to get control of your monthly spending by consolidating all of your loans into a single payment. Furthermore, these types of loans can be helpful in paying off problematic past due balances and help you avoid further late fees or other service charges associated with late payments on some types of unsecured loans.

There are many types of consolidation services available; however, you should be aware that some of them - though they will help you eventually get out of debt - may have a negative impact on your credit rating. While many creditors will accept offers made by consolidation agencies, they do so as a last-ditch effort to get paid. Furthermore, most creditors will continue to report your late payments, defaults and negotiated settlements on your individual credit report.

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