Debt settlement companies promise to help you with unwanted collection calls, personal loans debts, and more. If you have many payday loans and other loans, these services can be tempting but keep in mind that they may not be a perfect solution for a few reasons:
1) These companies can be costly. Some companies charge 13%, 20% or even more of your total debt. Even some “non-profit” debt counseling services charge hefty fees. If you are interested in debt settlement, make sure that you determine the total fees of a service – including any hidden fees. Make sure that the services you are getting are worth the cost.
2) Your lenders will not be happy. You might even get sued, since most debt settlement companies have you stop making bill payments while the company “negotiates” with your lenders and creditors. Sometimes, the debt settlement process can take months or even more than a year and most lenders have serious consequences in store for you if you stop paying bills for this long. Even if you are working with a debt settlement company, you are still solely responsible for your bills, so lenders will come after you.
3) It might take longer than you thought. Many people facing mountains of personal loans, signature loans, credit card debt, payday loans, and other debts assume that debt settlement is a fast alternative. Most companies promise to make collection calls stop at once. However, the entire process can take months and can even have a negative impact on your credit rating.
4) It might not do anything for you that you can’t do for yourself for less. Some companies do nothing more than call your creditors and ask for late fees to be removed and interest rates to be lowered. You can do this yourself. Some companies do little more than find you consolidation loans. Again, this is something you can do for yourself at no cost.…