Debt Consolidation Non Profit Organization - Is It Really Free?

If you have debt with a number of credit cards and or companies and you are continually being pressed to pay one or the other or even pay all then here are some things to consider.

If you feel you can comfortably pay all of this debt over time but you would like to have all of this debt under one umbrella with an interest rate that is less than the individual rates you have with each credit card or vendor, then, Debt Consolidation could be for you.

The question as to whether it is for free is of course misleading. I am sure that you have come across the phrase that there is no such thing as a free lunch. Well, "NO," it is not free but by consolidating your debt you could well be saving yourself interest as well as a lot of frustration trying to deal with all of these various vendors.

Here is what you need to do if you feel debt consolidation is for you. Make an appointment to see the company that is offering a debt consolidation service. At the interview find out what are the fees for this service, what interest rate will you have under your debt consolidation agreement and of course is it less than all of the other individual rates that you are currently obligated to pay.

You should also make sure you find out over what length of time you are meant to pay this off. Most important though is that you are comfortable with the new arrangements, are the monthly/bi-weekly payments within your capacity to pay?, are you paying less interest over the life of this debt than what you currently face, and finally are there any penalty clauses and what triggers those clauses.

The point I am making is that if you do some research making sure you understand all of the terms of the agreement with various debt consolidation companies you can do a comparison between them and find the one that has terms that you are comfortable with and of course only make the decision to consolidate your debt if the terms of consolidation are such that either the amount of interest you have paid over the life of the agreement is less than what you would have paid under your current situation or the payments are such that you feel you can comfortably make them on time. By this last statement I am thinking of a situation where you just cannot afford to pay the monthly premiums. You could ask them to structure the agreement to bring your payments down to a level you can afford. If they agree to this arrangement then you will be paying this amount over a longer period of time and under such an arrangement you might well be paying more interest over the length of the agreement than what you are currently faced with, but you could well feel more in control with this situation.