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Frequently Asked Questions regarding Debt Consolidation Companies
| 1. Consumers can lower the cost of credit with debt consolidation companies. |
True
Many consumers choose to consolidate through a second mortgage or home equity line of credit. This option lowers the amount of money that has to be paid on credit. Using home equity, however, secures debt to personal belongings. If payments are not made in a timely manner, property can be seized to cover the cost of any bills. This may be a good choice in some cases, but it can be a very poor choice for someone with deep financial problems. The individual could end up losing almost everything they own. |
| 2. Debt consolidation loans increase the number of bills a consumer pays each month. |
False
Debt consolidation loans decrease the number of bills that a consumer will pay each month. These pay off several other loans or credit card accounts. Many people find that this is an efficient way to reduce bills and financial problems very quickly. There are other alternatives that should be explored before making the final decision for alleviating money problems. |
| 3. Debt consolidation companies can relieve consumers of collector harassment. |
True
Debt consolidation companies can save individuals from the stress of debt collectors. Many of these companies will handle all of the calls to creditors, eliminating the pressure from intimidating collectors. |
| 4. Debt consolidation companies negotiate terms with banks. |
True
These services negotiate with banks to help the consumer to receive lower monthly payments and better interest rates on loans and payments. Debt consolidation loans and other programs are designed to help consumers pay less and get out of financial problems quickly. Services and companies can also negotiate with banks to rid consumers of late fees. |
| 5. In Old Testament times, debt was cancelled every seven years. |
True
Deuteronomy 15:1-2 - At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the LORD's release |
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