If you are dealing with debt, you are probably wondering about the many free debt consolidation ads and offers that you see.
It seems like the moment you get in credit difficulties, these ads start flooding your mailbox.
How is it that debt consolidation companies can offer free debt consolidation? Are they really out to do it just to help you? If you are skeptical of these offers, you have good reason to be.
See, credit consolidation companies are in the business to make money.
Even if they are non-profit organizations, they still need to make an income to cover their expenses.
So what's the catch? Are free debt consolidation offers really free? In a way these offers are free.
There are not fees for the service as there are with some debt consolidation programs.
When you work with the credit counselor to lower your monthly payments, you are not paying for this service.
However, you will pay interest on the final debt consolidation loan.
This interest is how the debt consolidation company makes money.
Is this a bad thing? Not necessarily, because you are already paying interest on your existing debts.
Often these free debt consolidation offers have lower interest rates than the total interest you are paying for your current debts.
So you still benefit, even though the offer isn't completely free.
So how can you evaluate the free debt consolidation offers you are receiving and choose the best one.
First, thoroughly read the offer to make sure that there are no hidden fees.
Make sure that it really is free! Then, see what the interest rate is compared to the interest rates on your current debts.
Take the average interest of your existing debts to compare the two.
This will show you if you can actually save money with the free debt consolidation offer.
If so, then this might be a great choice to help you deal with your debt problems.