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4 Tips for Choosing Debt Consolidation Companies

Duke Corban

February 28, 2017

If you are like most folks in the country, these are uncertain times financially. The Federal Reserve says the average household in the U.S. owes a total of $ 132,259 including mortgages. Credit card debt tops in the type of debts mostly owed by households in the country followed by mortgages, auto and students loans.  In such a situation, financial advisors are in high demand to help household owners get a reprieve from mounting debts.

Debt Consolidation as a Godsend

This is one reason why debt consolidation has become so popular among household owners. By consolidating smaller debts into one single payment, borrowers get some peace of mind from the ever eager collectors.

More importantly, it becomes easier to manage the monthly income while also improving your credit rating by making prompt payments for the new loan. These loans also have lower interest rates, meaning household owners have a better cash flow and this goes a long way to improve their financial situation.

Finding the Right Debt Consolidation Service

Due to the popularity of debt consolidation, many companies have come up to offer these services. As a consumer, you need to be cautious when choosing from among the thousands of debt consolidation companies.  

There are many consumer complaints in the industry against unscrupulous companies that claim to offer debt consolidation though they don’t have the capacity to do so. To avoid falling for a scam, here are some factors you must consider:

1.  BBB Accreditation

The Better Business Bureau (BBB) provides the best platform to help gauge the reliability of the debt consolidation company you want to use. The best companies will be listed on your local BBB and they should be accredited. More importantly, they should have a high rating, preferably of above B, as this confirms the services offered are top quality. If you find unresolved complaints against a company, avoid using their services.

2.  Check Registration

Any reputable financial organization will work hard to build a solid reputation and this starts with registration. There are different organization bodies which help to set standards in the industry including The Association of Independent Consumer Credit Counseling Agencies and The National Foundation of Credit Counseling. And your debt consolidation company should be a registered member. This guarantees that the services you receive are guided by a code of ethics.

3.  Customer Support

A reliable debt consolidation service should invest heavily in the best customer service to ensure any queries by consumers are answered promptly. Before taking out a loan from the new lender, ensure you test the level of customer service by calling or sending a query through their online platform.

4.  Online Presence

Any business that does not have an online presence today is either not serious or the owners are trying to hide from public scrutiny. Do an online search for these companies and check the state of their websites to get an idea of how established the lender is. If the site is not regularly updated, it is likely that the lender will not even fulfill any guarantees they have given.

Still struggling with multiple debts? Go ahead and use these tips to find a reputable debt consolidation company.

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