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If you are considering a debt consolidation loan then I must warn you that you need to do your homework and fully checkout any company that you choose to do business with. You can not imagine how many scams are out there, all looking for and preying for those in trouble.
It is essential that you understand the difference between debt consolidation and debt settlement negotiation.
If you are planning on using a debt settlement company do keep in mind that debt settlement companies may charge hundreds of dollars as an initial set up fee and this is to set up your account and they also charge a monthly service fee as well. This fee may vary depending on the amount of your debt and the company you choose.
Debt settlement companies do not make your monthly payments but instead they take your money every month and put it in a trust account and then negotiate the debt with your creditors. Only then do they make a deal with your creditors and when there is enough money in your account to pay a creditor they will pay a specific creditor in full.
This process can take years especially if you have a lot of debt with different creditors. While all this is going on you still can be sued by creditors or worse have your wages garnished. You can very well end up in the same position as if you did not make any attempt to pay and you know that the only one getting paid is the company taking your money.
It is important to note that settlement companies don't ask your creditors to stop all interest and late fees from pilling on. While you are in the process of negotiations your fees will keep piling on and you will owe more than before.
There less than honest companies feed on consumers who are desperate and in need but they fail to tell you how they operate up front. Be wise and check them out before you sign on the dotted line so you do not get yourself in more trouble than you are already in.
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