Budget and Credit Counseling
A credit counseling service is designed to help people struggling with their finances to develop a plan to get out of debt. This usually involves negotiating with creditors to work out a repayment plan and establish a debt management plan for you. The credit counselor will perform this negotiation for you to help get reduced payments, fees and interest rates. In many cases you will be offered a debt consolidation loan where all of your debts will be paid off and you will be left with one easy to manage loan at a low interest rate.
Benefits and features of a debt management plan
Having a credit counselor negotiate with your creditors and develop a debt management plan can have many positive impacts on your financial situation such as;
- You will usually end up paying less than making individual payments by yourself. A reduction of 10-20% is common!
- You will also be offered a reduction in your interest rates (especially if you have credit card debt). Some very good credit counselors will get your interest rate cut back to 5% or less, with some eliminating interest altogether!
- You will be given a clear plan to recover your finances and improve your credit rating!
- You will usually end up paying less than making individual payments by yourself. A reduction of 10-20% is common!
- You will also be offered a reduction in your interest rates (especially if you have credit card debt). Some very good credit counselors will get your interest rate cut back to 5% or less, with some eliminating interest altogether!
- You will be given a clear plan to recover your finances and improve your credit rating!
The best credit counseling services will also thoroughly go through your finances with you and develop a working budget. From here they will be able to give you an estimate of the time taken to escape your debts and have financial freedom again.