by benmarkham0 on Fri Jul 09, 2010 3:58 am The Consolidation Service:
Consolidation services are provided by companies that will consolidate your debt by negotiating improved interest rates (lower) and terms with your creditors, therefore reducing your monthly payment considerably.
They will then ask you for a monthly payment that they will divide between your creditors, as per their negotiated agreements with those creditors. This is a good alternative for those who are unable to get a loan for one reason or another and does provide similar monthly savings but the downsides to such services are as follows:
*You will be charged every month for this service, whilst you use it, although some states do have a limit imposed on this charge. In California for example you will not be charged more than $20 a month.
*You are handing over control of your credit card debt and are therefore not in the driving seat.
*There are many ’scam’ operators out there currently ripping desperate people off, so you will need to show caution when choosing who to use.
*Your debt will take considerably longer to clear than it would with a consolidation loan, meaning you will pay more.
*You will not save as much money as you would with a credit card consolidation loan.
