is a far bigger problem at this point than in the past for obvious reasons. The current economy has forced people to make decisions that would not otherwise choose. People are now looking for free debt consolidation service provider. But is there really such a thing?
Many people confuse the term with a free-for-profit and they are not the same thing. Just because a company's profit does not mean that they have no cost. If you are considering using a credit counseling agency as a debt relief options, you will be charged a small fee to set up (no more than $ 50) and a monthly fee ($ 30 - $ 50). This May not seem like much, but let's take a closer look at how it all crashes.
If you have $ 15K in credit card debt at 19.9% (which is actually conservative), and you make 2% minimum payment of $ 300 each month. This will take you 108 months or 9 years to repay $ 15K to charges and will return your credit card company $ 32,400.
Suppose that same $ 15K with a credit counseling service, which costs $ 50 setup fee and $ 50 a month in fees. You will be making the same $ 300 and pay an additional $ 50 per month in fees, but will only be paying 9.99% interest rate. During the life of the repayment period (65 months), you will be paying back $ 19,500 on your credit card company and $ 3.250 for a credit counseling agency. This amounts to a total of $ 22,750. Thus, although the credit counseling service was not "free" to save the $ 9,650 and took more than 3.5 years off your repayment term.
Just because something is free does not mean that it did a good job and can not save money in the long run. There are several options for getting out of debt. the choices made will depend on the individual situation of individuals and disciplines involved.
only free method of doing anything are the ones that you yourself, and you can use this method for getting out of debt. But if you have more than $ 10K in debt and only making minimum payments, you're probably going to want to get some outside help unless it can make a very strict plan and stick to it. There are more than one debt relief option. It is up to you to decide who will be the best fit for you.
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