Have Questions About Debt Consolidation? Find the Answers Here!
A big part of our job as certified credit counselors is to answer any questions you may have on your journey to get out of debt. We want to make sure you can make informed choices and have peace of mind that you’ve developed the best plan to get out of debt.
With that in mind, you’ll find answers to the most common questions that we receive about debt consolidation, interest rates, and our program below. If you still have questions or can’t find what you’re looking for, please don’t hesitate to call us. We’re here to help!
With a debt consolidation loan, you take out a new loan from a private lender. You use the funds from the loan to pay off your credit cards. So, you no longer owe the credit card companies and instead, you owe that new lender.
Consolidated Credit is not a loan company. You are not getting a loan from us. Instead, we work with your creditors and you to set up an affordable repayment plan. But you still owe your original creditors. As you make payments on the program, you will see the balances gradually decrease on your statements.
Another big difference is that you don’t need good credit to qualify for a debt consolidation program through Consolidated Credit. Getting a loan requires good credit.
A certified credit counselor can help you understand the difference between the two approaches. They can also help you assess which is right for you based on your budget. As a nonprofit organization, we’re here to help you choose the best option, so if that’s a loan, we’ll tell you that. You can call (888) 262-4108 for a free consultation.
Rates on a debt consolidation program through Consolidated Credit will typically between reduced to between 0% and 10%. The exact rates you will pay will depend on a few factors:
- How much you owe
- Who you owe
- Your financial situation
We will contact each creditor you owe and work with them to get the lowest rate possible for you based on your situation. Each creditor would agree to lower your rate to a set percentage. In some cases, that will be 0%, To understand what rates you can expect on the program, call (888) 262-4108 to speak with a certified credit counselor for free. You can get a free debt and budget evaluation, and your counselor will tell you what to expect.
The consultation is confidential and you are under no obligation to sign up for anything. So, you can get a savings estimate and compare that to quotes you get from lenders for a consolidation loan.
It may be, but it depends on your financial situation and credit score. With excellent credit, you may be able to qualify for a low-interest rate debt consolidation loan. If your credit score is lower, Consolidated Credit’s program may offer lower rates.
We recommend that you explore all your options thoroughly before you choose one. That way, you make the most informed decision possible. You can request quotes from lenders to see what they are willing to offer. Then you can get a free evaluation from a certified credit counselor to see how our program compares.
A debt consolidation loan will typically have a loan origination fee between 1-5% of the amount borrowed.
A debt consolidation program with Consolidated Credit will have a one-time setup fee and a monthly administration fee. These fees are set by the state where you reside but are capped nationwide at $79. The average client typically pays about $49, but it can vary based on your financial situation and circumstances.
Fees are paid from the monthly payment you make to Consolidated Credit, so they are part of your consolidated monthly payment.
If you are facing severe financial hardship, are a Veteran, or live in a federally declared disaster area, fees may be waived.
You can call (888) 262-4108 to speak with a certified credit counselor to understand what fees you would pay based on your situation. Ask any questions you have about the fees so you can understand them and know what to expect before you enroll.
No. The program that Consolidated Credit offers pays back the total balances owed on your credit cards. That’s important because it means you won’t negatively affect your credit by discharging part of the balance.
By contrast, with debt settlement, you only repay a portion of the balance you owe. A private debt settlement company will negotiate on your behalf to get you out of debt for the lowest possible percentage of what you owe. The remaining balance gets discharged, Discharged balances are bad for your credit. Each account discharged will be noted as a negative item on your credit report for 7 years from the date the account first became delinquent. These types of negative items can significantly reduce your credit score.
Here is a list of the key differences in our program from debt settlement:
|Debt Consolidation||Debt Settlement|
|How much debt do you repay||All of it (100% of principal)||Some of it (average 48% of principal)|
|The effect on your credit||Positive or neutral||Negative|
|Fees||Set by the state where you reside; $79 cap nationwide, average $49||20-25 of the original amount enrolled or amount settled|
|Monthly payments||Distributed to creditors each month as agreed||Put in set aside account; creditors do not get paid monthly|
|Time to payoff||36-60 months, on average||24-48 months, on average|
|Creditor approval||Positive or neutral||Negative|
If you are not sure which solution is right for you or would like assistance comparing them, call (888) 262-4108 for a free consultation. A certified credit counselor will take the time to explain ALL your options in detail and answer any questions you have.
This will depend on the amount you owe and your budget. The program has been shown to reduce a client’s total payments by up to 50%.
When you call for your free consultation, you and your counselor will evaluate your income and expenses to set a realistic budget. You will find an affordable monthly payment that will work for that budget. The goal is to make sure you can repay your debt while still affording all your expenses.
If you want to know what your monthly payment would be on the program, call (888) 262-4108 to speak confidentially with a certified credit counselor.
Any card you include in the program will be closed in good standing once the balance is paid off. This helps you avoid negative items on your credit caused by discharging a balance through debt. settlement or bankruptcy.
You can keep a card out of the program if you would like. If you need a card for emergencies or travel, you can keep that card open. Business credit cards may also be kept out of the program.
Yes. You can get loans like a mortgage or a car loan or a student loan while you are enrolled in the program. In fact, qualifying for a mortgage or auto loan may be easier once you’re enrolled because you will have less debt to affect key debt ratios that lenders check before they approve you for a loan.
You will not be able to apply for credit cards while you are enrolled in the program. However, once you graduate, you will be able to get credit cards if you choose to get new cards.
You can call (888) 262-4108 for a free consultation with a certified credit counselor to discuss your cards and the best plan for you.
Your spouse is only required to enroll with you if your credit cards are held jointly with them. Joint account holders would need to enroll together. However, if you each have separate accounts or your spouse is only an authorized user on your accounts, then they would not be required to enroll.
If you’re having trouble making a payment, all you need to do is call our Client Services Team and they will do everything they can to assist. That can include adjusting the payment due date, adjusting payments based on your new circumstances, or asking creditors to understand extenuating circumstances that could be making it difficult for you.
Remember, we’re here to be your advocate! So, we’ll work and do everything we can to make sure you can keep up with your plan to become debt-free.
If it turns out that you can’t make your payments or you wish to resign, the program with Consolidated Credit is voluntary. So you can withdraw at any time without any penalties or fees.
All payments made to your balances during your enrollment will still be credited to your account. However, creditors may restore the original interest rates and fees that were applied to your account before enrollment.
You can start the process online! If it’s during regular business hours, you should see a Live Chat button in the bottom right corner of your screen. You will connect with a certified credit counselor who can answer any questions you have and start your debt and budget analysis.
You will complete the analysis with a consultation over the phone. Credit counseling is personal. It’s important to speak with a counselor directly so you can have an open dialog about your situation and the potential solutions you have.
The consultation will take about 30 minutes to an hour, depending on what you cover online and how many questions you have for your counselor.
Meet Some of the People We’ve Helped
How Much Could You Save?
Just tell us how much you owe, in total, and we’ll estimate your new consolidated monthly payment.
People We’ve Helped…
*All testimonials are from our clients. We respect the privacy of our clients. At their request, some of the pictures depicted may not be the actual client giving the recommendation.