Know About Payday Loan Debt Consolidation Program
A debt consolidation service is designed to help the consumers to make their way out of the payday loan debts. It is an excellent way to let the customers restart their financial journey in a better direction. There are various companies in USA that can help in consolidating loans. Debt management, debt settlement, debt relief, and debt negotiation are different programs to get rid of debt. Each program has certain features that could help to solve debt problem. It all depends on the consumer which option they want to avail. They can also ask for in-house debt counseling. There are several intermediators like Furnish Loans that refer the clients to third party companies, debt attorneys and credit counselors that offer consolidation solutions.
How to Measure Trustworthiness of Payday Loan Consolidation Companies ?
The financial market is so active in present era that changes inculcate overnight in the loan market but no matter what, the trustworthiness and longevity of a company still matters in this crucial service. It is very necessary to check the previous record of the company to build confidence in them. The key point to maintain trust and rapport with the companies is that company should be at least 10 years old and its performance must be consistence in solving people’s problems. Most of these consolidation companies are accredited with BBB(Better Business Bureau) with the all the information about their so far work stored there.
How to Avoid Scams ?
The financial market is well known for increasing scams so it is better to stay warned from the following signs:
- Some companies claim to be non-profit but they’re actually profitable businesses.
- Some of them offer guarantee to settle for less.
- Some companies ask for upfront fees for services before signing any written agreement with creditors.
- Some claim the fake promise of quick fix solution but actually these programs take between three and five years to solve debt problems.
FTC Rules and Regulations for Debt Relief Companies
The Federal Trade Commission has imposed strict rule known as Telemarketing Sales Rule (TSR) for debt consolidation companies to protect consumers from any kind of scam. Following are the provisions under this rule:
The most prominent provisions of the TSR are:
- Customers should not pay upfront fees to companies as they are not allowed to collect a fee until they have satisfactorily resolved their customer’s debts.
- A debt relief company should clearly state that how long it will take to get the debts resolved and what will be the total cost.
- Both the parties debtor and creditor must have written settlement and the customer must make at least one payment to the creditor before the debt relief company can collect a fee.
- If the customer has multiple debts, the company may collect a fee for each debt settled, but none of them cannot be collected before settlement.
How does it Work?
The payday loans Denver consolidation program and in other US states allows to combine all the short term loans into single installment loan and the customer has to repay the loan amount in periodic payments that are fixed. This loan contract has lower monthly payments because the total principal amount is spread over long time period. Also they have lower interest rates as compared to basic short term loans. On a whole such a consolidation program is advantageous to protect oneself from defaulter case.
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