When facing a mountain of looming debt, it’s not enough to just run and find shelter. You need to find a safe and quick way off the mountain! Before your personal finances come crashing down, make a plan and take action.
One way to eliminate your debt is through consolidation. Consolidated debt can be managed through a loan or working with a debt management program. While there are many agencies to choose from, the best debt consolidation companies share similar qualities. Keep reading to find out what criteria to look for and how to avoid debt in the future.
Best Debt Consolidation Companies Top 10 Must-Haves
Debt consolidation can be a great path forward for many consumers. However, there are many companies that are looking to take advantage of people drowning in debt. You must be vigilant as you decide which company or agency to trust.
Take a look at this must-have list of the best debt consolidation companies to help guide you:
- Non-profit organization
- In business for 7 Years
- Have a state license
- Charge no minimum fees
- Excellent standing and client reviews
- Solid Better Business Bureau rating
- Clear language and action plan
- Accredited by an outside agency, like AICCCA or NFCC
- Certified credit counselors
- Available to clients for questions & concerns
The best debt consolidation companies have a good reputation. They should be trusted by industry experts, accreditation agencies, and their clients. A well-rounded company will have been in business for several years as a non-profit agency. A non-profit is focused on helping you and achieving its mission in the community rather than profit margins.
It may take some time to research various debt consolidation options. However, it will be time well spent. The Internet is a great resource. Additionally, talking with friends, family and coworkers can be a fantastic way to get first-hand knowledge of a company. You will hear about the good companies as well as the bad ones. This information can be invaluable for getting rid of debt.
Debt Consolidation Loan
A debt consolidation loan is one way to pay off debt. You take out one new loan to pay off multiple loans or credit card balances. Ideally, the new loan has a lower interest rate than your old debts. This is how you save money, reduce your monthly payment and pay off your debt quickly.
However, not all consumers fit the profile for a debt consolidation loan. If you are deeply in debt, you may not qualify for an interest rate that is low enough to make consolidating loans worthwhile. Plus, the cost of originating the new loan is an added expense.
Even if you do qualify for a good interest rate, consolidation loans don’t necessarily help you make a plan to address the reasons you got into debt in the first place. Oftentimes, consumers who turn to consolidation loans end up having the same amount of debt or higher within a few years.
Debt Consolidation with Debt Management Program
Fortunately, loans are not your only debt relief option! Debt management is a highly effective alternative to a loan. Rather than taking out a new loan to consolidate your debts, you can work with a non-profit credit counseling agency. Now, you write one check each month to the agency; then it will be distributed to your creditors. The best debt consolidation companies can negotiate on your behalf to get lower interest rates and a reduction in monthly payments.
By choosing a debt management plan rather than a loan, you’ll develop the financial discipline you need to pay your debt off more quickly. Typically, this happens within 60 months. Finally, you’ll develop the habits that will enable you to live a debt-free life in the future.
Debt Management With ACCC
As one of the nation’s leading non-profit debt management agencies, ACCC offers a way to consolidate unsecured personal debts without having to borrow more money. Our simple, effective debt consolidation options have been helping American families turn around their financial lives for over 25 years. Our commitment to consumers is demonstrated by our A+ grade from the Better Business Bureau and by the outstanding credit counseling reviews and debt consolidation reviews we’ve received from satisfied clients.
There are several important benefits to working with ACCC:
- Often creditors are willing to reduce your interest rate and waive outstanding fees such as late fees or over-limit fees.
- All or most of your credit accounts involved in the program will be closed to further spending, so you can make genuine progress on reducing and ultimately eliminating your debt.
- The program includes financial counseling geared toward helping you enhance your credit management skills so you can steer clear of debt problems in the future.
- ACCC negotiates with your creditors not to reduce your principle owed, but rather to reduce interest rates and any outstanding late fees or over-limit fees. In many cases, this can have the effect of reducing your total monthly obligation and the time it takes to pay off your debts.
- You make one consolidated payment to ACCC each month, and we then pay each of your creditors.
- We provide you credit counseling and educational resources to help you strengthen your credit management skills and stay on track toward a future free of excessive debt.
How to Avoid Future Debt: Budgeting Tips
A budget is a plan for your money. It can tell you whether you’re going in the direction you intend. You may find you’re spending way too much on groceries and not able to save for a house like you want. It’s important to create guidelines to measure your progress.
Here are some other reasons why you need a budget and how it can help you and your finances:
- A budget will tell you if you’re living within your means.
- Following a realistic budget frees up spare cash so you can use your money on the things that really matter to you instead of frittering it away on things you don’t even remember buying.
- A budget helps you prepare for emergencies or large or unanticipated expenses.
- A budget can improve your marriage. A good budget is not just a spending plan; it’s a communication tool.
- A budget can keep you out of debt or help you get out of debt.
- A budget actually creates extra money for you to use on things that matter to you.
How to Stay Motivated to Follow the Budget
Following a budget is not always fun. It can feel overwhelming and restrictive. But it still remains paramount to achieving your goals.
Take a look at these budgeting tips when it’s tough to keep going:
- Create a visual reminder you can see easily and update- like a thermometer to fill in or a photo of your new house.
- Review the numbers each month to acknowledge the progress.
- Find ways to boost your efforts from time to time. Sell some items, work extra or do a spending freeze to give yourself more energy.
- Treat yourself a little bit to relieve some spending frustration.
- Plan future goals that bring joy and excitement rather than just focusing on eliminating debt.
- Stay connected and make it easy using a mobile-friendly budgeting app.
- Finally, take a moment to remember how far you have come!
Eliminating your debt is possible with a little help from the pros. As you research your options, remember what qualities the best debt consolidation companies have.
Call our certified credit counselors today at 800-769-3571 to get help managing your finances.