Frequently Asked Questions about Understanding Debt Consolidation
Here are the answers to the most commonly asked questions about how to understand debt consolidation.
Will debt consolidation hurt my credit?
The effect debt consolidation has on participants' credit scores will vary. Some creditors may not hold consolidation against you, while others will be reluctant to issue credit to past consolidation customers. The effect on your credit score will depend on your amount of debt, past payment performance, your creditors, and your consolidation company.
Who can help me understand debt consolidation better?
If you sign up for a free referral on our site, we will put you in touch with a debt consolidation company that can address your questions and concerns. The company will most likely hold a debt consultation with you to evaluate your finances and discuss the potential efficacy of a consolidation program. Our consolidation partners are always more than willing to clear up any confusion about the process.
Do you consolidate debt on this site?
No, we are not a debt consolidation company. Our mission is twofold: to help you better understand debt consolidation and to provide complimentary referrals to our consolidation partners. When you sign up with us, you are not signing up for debt consolidation directly.
How do I qualify for debt consolidation?
Every consolidation service will have different requirements. Typically, though, consolidation companies tend to require the following (varies by service):
- At least $5,000 of unsecured debt
- Not currently enrolled in a debt consolidation program
- Understand that cards included in consolidation must be canceled
- Not more than three months behind on payments
I understand debt consolidation services are geared toward borrowers who are delinquent on their payments. What if I'm not behind on my payments, but I want to enroll to improve my interest rates?
Formerly, debt consolidation services were designed for consumers who were having trouble paying their bills on time. However, the face of the debt consolidation industry has changed drastically in recent years. Now, many consolidation customers simply want to make their interest rates more reasonable and get out of debt in a shorter amount of time. Whether you're behind on payments or just would like to optimize your interest rates, consolidation can help.
What will debt consolidation cost me?
You should ask your consolidation service this question for a more definitive answer. Every program charges different fees. Typically, consolidation services will charge an up-front fee to cover their commission and a monthly fee to cover administrative costs.
