How to Choose a Free Debt Management Plan
If you are drowning in debt, you may be tempted to use free debt management plans to try and pull yourself out of it. However, this may not always be the best way to go about tackling an issue. For starters, these programs are not normally free. In fact, they may actually end up costing you more money than if you go without a debt management plan at all.
Think about it for a minute. What is the cost to you to go without a free debt management plan? To begin with, you may never really get out of debt. Even if you manage to pull yourself out of it, chances are that you will end up having to get back into debt again within just a few years. This means that the free debt management plan that you thought you were getting in the first place is unlikely to last very long.
Now, does this mean that you should pass up on a free debt management plan? No, not necessarily. You do need to think carefully about it. The free debt management plan that you thought you were getting was not likely to be the kind of debt-management plan that is going to help you much long term. In fact, it is likely that it will hurt you long term.
For one thing, you might be enticed by the free debt management plan because it will give you a nice lump sum payment each month. After a while, you will probably think that you will be able to pay off your debt without too much of a problem. However, once you start receiving monthly payments again, you will find that you have paid off only half of what you owe, if you even paid at all! Instead of saving money by having this free debt management plan, you could end up spending more money to try to get rid of the rest of your debt.
Another thing that you need to watch out for when it comes to a free debt management plan is that you will likely have to pay a fee to use the service of a debt management company. The good news is that most companies that offer free debt management plans do so through a nonprofit agency. However, the bad news is that many of these nonprofit agencies charge their clients a large amount of money in order to use their services. The fees charged by these companies can often be very high, especially for people who do not have good credit ratings.
Even if you get a free debt management plan from a nonprofit agency, you still need to watch out. If the debt management company tries to charge you for a consultation or any other type of service after you have paid the fee, you may want to move on to another company. If they try to charge you before you have saved enough money to pay them, you should not allow them to do business with you. When it comes to using a free debt management plan, make sure that you look for one that gives you the option of paying off your debts over time.
You also need to be wary of any free debt management plan that charges you for an appraisal of your current financial situation. Be wary because this can be a sneaky tactic used by some lenders in order to get you to pay off too much debt. What you may be offered are statements that show your debt as being between five and ten thousand dollars. These statements are not an actual deduction of debt and will only be applied to your annual fees and any other charges you have to make. If you are asked to pay for an appraisal that is more than your current debt, it is probably a good idea to find another lender.
It is important that you find a free debt management plan that is actually free. When you pay for something, there is generally some kind of benefit to the item. When you pay for a free debt management plan, there is no tangible benefit to you other than the fact that you don’t have to pay for it. This is why it is so important that you search for a free debt management plan that offers real assistance to you instead of false advertising. You can easily do this by doing a simple search online.