What is debt consolidation counseling?
Debt consolidation counseling is also called credit counseling. To understand better this concept, you should realize that debt counseling can take different forms, depending on which kind of debt you have and which option you will choose to deal with your debt.
For example, if you have unsecured debts like credit cards or personal loan, medical bills or any other non secured debt, with an amount exceeding $10.000 and you cannot keep up with the monthly payments; you might consider debt consolidation as an option to solve it. However if the amount is less, the debt management program will be a fair option.
Having said that, we all know that everybody has a different debt situation, therefore, credit counseling could be the right option for some and won’t be for others. That is why you need a good debt consolidation counselor to help you decide which option you should take and advice you all the way through to reach your financial goals.
Generally, companies that offer debt consolidation, debt settlement, debt negotiation and debt management, they do refer themselves as counselors as well and some of them do offer free counseling services. However you might have heard about non-profit credit counseling agencies and you are thinking of getting free services. At this point I have to tell you if it’s so too good to be true, then…
You always have to do your homework before getting involved with any debt relief or debt counseling organization.
Howdebt consolidation counseling can benefit you?
The debt counseling sessions have a purpose of analyzing, assessing and planning about your debt situation and the potential ways to solve it. This step is important because psychologically will prepare you to take the proper path that you will choose to follow, when dealing with your debt problems.
In view of the fact that everyone’s debt situation is different and unique, the best way for you is to talk to a qualified credit consolidation counselors. On the other hand and in order for the debt counselor to help, you have to give some information relevant to you and to the debt situation you are in.
For example when you call for credit consolidation counseling, you will be asked to send information such as your financial details, your income, living expenses, and the amount of debt, which your counselor will base upon them and come up with an action plan that will be specific for you to take part. He may suggest a debt consolidation loan, debt consolidation plan, or other financial options. They will educate you about the pros and cons of each to help you reach a decision.
Debt counselors are knowledgeable about all types of financial programs, so they may direct you to some good sources for help. They may also help you realize immediate savings by helping you to cut expenses or lower interest rates on some of your bills.