Many people are currently, or have been for quite some time, struggling under a heavy debt load with countless increasing credit cards bills and auto loans, to name just a couple.
Many have reverted to using debt consolidation services in order to regain control over their finances to help restore some order back to their personal finances.
Considering the use of debt consolidation services is a good idea as they can help to lower your interest rates and therefore your monthly payments.
However, when demand is high for a specific service there are always companies that are only too willing to take advantage of people who are desperately looking for a solution to their problems, irrespective of what that problem may be.
A lot of these companies operate online as it is much easier for them to disguise any ill intent they may have.
There are certain things you should look out for that should warn you away from any possible encounters with these unscrupulous companies: Excessive Fees and Charges Being asked for money up front should be your first red light.
If you are asked to make a payment up front for a review of your finances; this payment could be anything up to and over $100, don't! The truth of the matter is that your finances will be reviewed as part of the service by reputable companies anyway, so why should you pay? Another, little scam that many of these companies pull is when they offer an "educational program" that is usually compiled of free forms, letters and information that can be easily found online.
They then ask for an outrageous fee for this, in some cases this can be as high as $1500! In conclusion there is no reason why you should pay any money up front for any of these types of services; legit companies offer free counselling services and reviews.
False Promises Most debt consolidation services will provide you with an overall saving that can be as much as 50% or even 60% of what you are currently paying.
However, legit companies will neither promise nor guarantee savings as high as this.
The actual saving will depend upon what you can actually afford to pay and what your creditors will negotiate down to, based on those figures.
Any company making claims or guaranteeing you that they will get your "interest rates set to zero" or that "your payments will definitely be halved" or that this will be achieved "all in two weeks" are generally punching over their weight.
Exaggerated claims and guarantees are designed to lure you in, which is unfortunately acceptable in the marketing world; but, a reputable company will only inform you of the possibility of such high reductions and will talk you through what they believe they can achieve after reviewing your circumstances and seeing who your creditors are.
Whatever, the one thing you can be assured of is that the process should take at least a month, possibly longer, and any company that says they can do it is less time is making a promise that they surely won't deliver on.
Beware of Companies that Contact You Directly Spam, in all it's variations, is something we all have to cope with nowadays, and sometimes the premise of what is being offered often seems too good to be ignored, but this is the best course of action to take where debt consolidation services are concerned.
The only reason a company will offer services via spam is if there is profit to be made, and that profit will come from you.
Reputable debt consolidation services, especially those offering nonprofit services, do not generally send out spam or make cold calls looking for your business.
Reputable debt consolidation services gain business by being the best providers of a much needed service and because of this most reputable companies will wait for you to contact them.
Conclusion: These are the most obvious warnings to look out for but it is always good advice to check out a service provider with your local Better Business Bureau.
Here you will be able to see if the companies you are checking out have had any complaints made against them.