If you think yourself as many other common citizens, you might be just a few steps behind from a major financial hardship. After paying mortgage installments or rent payments, utility bills or credit card bills, insurance premiums each month, you must be getting very much frustrated. If you have debts that are increasing day by day, and you’re finding them hard to pay off, credit counseling service is the proper doorway for you to get some financial freedom.
How can a credit counselor solve your financial difficulties? Every year, more than a million counselors are helping common people when credit problems harm their financial entity. The credit counselors can't reduce the overall debt amount, but they are quite able to renegotiate the interest rates with the various lenders. They can often help you to lower your interest rates up to 50%. A credit counselor will:
- Create a proper debt management plan and a customized budget
- Remove all late penalties and other applicable charges
- Consolidate and make timely payments to each of your creditors
These activities may put you on the right track to financial stability. For that reason, if you really need a credit counselor now, who can get you out from the debt misery and hardship, read on as I show you how to look for good credit counselors:
a. Don't let them lure you
When you search, you must start it with a clean mind. Don’t be lured by the big, flashy ads, you need to think realistically and sensibly. Don’t get excited by the emails and phone calls from credit counseling agencies, they are just trying to offer their services. Professional and genuine credit counselors normally do their work depending on past client referrals. They don't bother calling you for advertising their business or using television, Internet or "spam" emails. Find out an agency whose counselors aren't looking for commission only.
b. Prioritize yourself always
Different people have their different financial obligations, and they need different solutions for different cases. So, find out if the counselor will suggest a plan to suit your personal obligations. Ask the counselor to provide a clean presentation of the charges and their reasons. As a general rule, you shouldn't pay more than $100 in set-up fees or $50 in monthly fees. Monthly fees will depend according to the state laws. After getting the full estimation, you can decide whether hiring a counseling agency is justified for you or not.
c. Prepare a debt management plan
After selection of a qualified credit counseling agency, you may be asked to submit your personal financial data, like - monthly income, expenses, net assets and debts. Your credit counselor will analyze the data. After reviewing your information, he will discuss with you about your current situation and how you can proceed next to solve your financial problems.
The credit counselor or the counseling agency will provide you a debt management plan (DMP). This debt repayment plan will give you the opportunity to repay your unsecured debts at a lower interest rate. It may also be possible that this plan will keep you immune from any late fees or other penalties. But this isn’t a free service, in return, the agency will demand a regular monthly payment from you.
So, instead of paying multiple creditors separately every month, you may have the chance to consolidate your unsecured debts and pay them off with a single monthly payment. The counseling agency or the counselor will then schedule your payments to your creditors according to your preferences.
d. Several other aspects to consider
- Don't take any snap decision. Surely you want to take a solid action to resolve your debt problems. But, an experienced credit counselor will grant you some time to think about the offer. Take your time and think it over, and then decide.
- DMPs normally pay off only your unsecured debts, secured debts like mortgage or car loan will not get settled through DMPs.
- A proper debt management plan may take approx 30 and 60 months to finish. So, you are requested not to have any new credit cards or any other debts.
- The credit counseling agency will provide you statements where they will show how your funds are getting utilized. The credit counseling agencies will also provide you counseling and education regarding your finances in the long-term. If you are seeing yourself in knee-deep debt and falling behind on every important bill, credit counseling can be a lifesaver for you.