Kristina Storey's Blog: Debt Consolidation Scams: Know the Signs to Avoid Getting Burned

Sunday, 18 June 2017

Debt Consolidation Scams: Know the Signs to Avoid Getting Burned

In a perfect world, debt consolidation scams wouldn’t exist. But unfortunately we do not live in a perfect world. So just like any other industry, there are unscrupulous companies out there. These companies try to take advantage of businesses that need their services as well as good, unsuspecting people like you.

Instead of falling prey to these heinous scams, prepare yourself. Know what to look for when you seek help from debt consolidation companies.

Let’s take a look at some of the most important things to look for when you’re seeking to consolidate your business debts. If you spot any of the red flags we share here, avoid those companies like the plague.

Red Flags to Watch For

1. Is the company trying to sell you services other than debt consolidation?

Unfortunately, there are a number of companies out there that make the claim of providing debt consolidation services. But then you learn this is just a technique that they’re using to get you in the door.

Once you sit down and speak with a representative of the company, they begin to try to sell you on other services. They want to work out deals with lenders, lower the amount of money that you owe to creditors, and things of this nature.

While you may think these things are beneficial in some ways, this isn’t actually debt consolidation.

During a legitimate debt consolidation process, a representative will never attempt to lower your existing balances. The only thing involved in debt consolidation is transferring your current debt to a new loan that has different, hopefully better, terms than your previous credit terms.

When a company attempts to lower your principal balance, this is more like a debt settlement service, not debt consolidation. It’s something totally different than what you’re attempting to do, and it’s a much greater risk that could potentially damage your credit score.

So, steer clear of any company that tries to take advantage of you by claiming to offer debt consolidation services when what they’re really after is providing debt settlement services instead.

2. They have aggressive and pushy sales tactics.

Entering into a loan of any type, including a debt consolidation loan, is a big decision. You need to take your time and give it some forethought. It’s not something you should immediately jump into the moment you hear about it.

So, if the company is pressuring you to make a quick decision about a debt consolidation loan, put things on hold. Take a moment to step back, catch your breath, and realize that this isn’t the best company for you.

If they really cared about your financial well-being, they wouldn’t attempt to force you into a specific debt consolidation loan in a matter of days. They’d allow you enough time to make a proper decision.

According to Debtconsolidate.company, a website sharing information about legitimate Christian debt consolidation companies online, “Many people today are turning to debt consolidation in order to find some much needed financial relief.”

Ultimately, you shouldn’t ignore debt consolidation. Just be careful about the company you choose to give your business to. Make sure they have your best interests at heart.

3. They claim debt consolidation is a quick-fix answer.

Watch out if a company swears that consolidating your credit card debt is going to be a quick fix. They may be trying to sell you a bill of goods and nothing more.

Consolidating your high-interest debts could certainly be a step in the right direction. However, that isn’t going to solve all of your financial problems. And getting out of debt is never a painless process.