Debt Settlement - Know Credit Counseling Better

When people are stuck up with debt more often, they are suggested to take some help from a credit card debt consolidation program, or any other type of debt consolidation program. For this, they have to take credit counseling. People can decide whether they want to go only for credit counseling, or in addition they want a professional company to take up the negotiation process with the creditors.

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There are certain pros and cons of debt settlement counseling. It is always better to make an informed decision, and be prepared with what you should expect when you get into it.

Advantages:

Credit counseling offers advantages such as:

• No more botheration of creditors calling.

• Put all scattered debts into one big payment.

• You will get a reduced rate of interest.

Disadvantages of hiring a credit counselor:

Credit counseling also has several disadvantages like:

• It is bad for the credit score. The creditors will make sure to report your consolidation status, since they view this same as Chapter 13 bankruptcy.

• It is too expensive. Monthly payments to your credit counseling may be difficult to afford.

• It can be a frustrating experience, since companies do not say what they will be actually doing, and in what manner.

• All the credit cards will be closed off, irrespective of the ongoing credit card debt consolidation counseling.

• It also takes long to finish - around five year.

• This counseling does not have a very high success rate.

No matter if it is a commercial debt counseling company, or even Christian debt consolidation companies, the counselors already have predetermined interest rates fixed with credit card companies. They also receive some share from this. This means that they earn from paying off your bills. This can work for people who’re currently paying high rates of interest on the credit card, and are having trouble to pay more than minimum amounts each month. The money you save is in fact the money which you would have kept paying for your interest rates.