If you are trying to get out of debt, you may have started looking into different options. Credit counseling is a great option to give you assistance in dealing with debt, even debt consolidation. However, is debt consolidation free using such a company? This option naturally comes with some advantages and disadvantages, so let’s take a look at the general industry as well as ACCC specifically for some answers.
Is Debt Consolidation Free at a Credit Counseling Agency?
Maybe you have several debts and several creditors. Generally speaking, debt consolidation sounds like a good option for you. One way to consolidate your debt is to go through a credit counseling agency. Using their debt management program, or DMP, your debts will be consolidated without taking on another loan. In other debt consolidations, your initial debts are paid off by a new loan that covers all the costs. Then, you only have one payment to make. Read more about the different ways to consolidate debt here.
For our purposes, let’s say that you have chosen to work with a non-profit, reputable credit counseling agency. So, is debt consolidation free through such a service? The quick answer is no. But, nothing good in life is free! While it may not be free, these services are regulated and are not out to rob you blind. They do, however, need to use fees to make their service possible.
Key Features of a Credit Counseling Agency
- A legitimate debt relief agency is open and honest. It should be willing to provide you a clear, detailed description of its product and services, and offer simple to understand debt relief programs. If the agency does not answer your questions or its answers are not satisfactory, go elsewhere.
- A reputable consolidated credit counseling agency will give you truthful, useful advice on how to manage your money and use credit wisely. The agency will also help you establish a written budget and offer educational materials and financial workshops.
- The agency should have been in business for at least seven years and be a non-profit. The advantage of non-profit debt consolidation companies is that they can offer their services for free or low-cost. They are funded in part by contributions from creditors.
How Much Does It Cost?
The fees charged by a debt consolidation company should be reasonable, meaning a maximum of $50/month for a debt management program. (Fees vary by state). Free ongoing education on how to manage your finances should be available and accessible – even if you decide against entering a debt management program.
Here are the costs specifically for American Consumer Credit Counseling, a non-profit credit counseling organization (ACCC). Be sure to call for the absolute, most current rates.
- $39 enrollment fee
- Monthly fee of $5 per account with a maximum of $35
- Average monthly maintenance is around $19 per month
No matter which avenue you decide to take, do your research. Getting out of debt shouldn’t put you into more debt.
For more information or a free credit counseling session, contact the certified credit counselors at American Consumer Credit Counseling by calling 800-769-3571.