If and when you end up in a pool of unpaid bills, it is sometimes better to turn to the debt and bill consolidation companies for help in this matter. There are many bill consolidation companies who are ready to pull you out of debt.
These bill consolidation companies help in the handling of payments for your accounts, and in the process, lower your interest rates. They are also capable of eliminating late payment fees from some of your creditors. However though bill consolidation may seem an interesting option when in debt, it is always better not to jump at the first offer you receive. It is better to compare rates and terms of different bill consolidation companies, and confirm that there are no errors in your payment statements before approaching them.
You can get the best debt and bill consolidation services from companies that concentrate on debt management, and not in bankruptcy and debt negotiation. When looking for the best bill consolidation company, it is imperative that you learn when your accounts will be paid. This is due to the reputed bill consolidation companies generally clear different accounts at different dates, while taking current rates into consideration. The only information they need from you at this point will be your account balance, and the names of the creditor.
Once you furnish this information, you can get a debt and bill consolidation quote from the bill consolidation company. Get numerous quotes from various companies, and on comparing quotes, you can pretty well find out which company offers the best rates and terms for you.
With the help of the bill consolidation company that you choose, they help you lower the interest rates of your creditors, and sometimes, also manage to eliminate any late payment or other fees the creditors may have. However, do not expect any changes in the interest rates of student loans or mortgages as they can not be reduced. So there is no point in consolidating these debts.
With bill consolidation, you only pay a single payment to the bill consolidation company. And using the money that you send them, they will pay the corresponding payments to the accounts that you had consolidated. Of course, these bill consolidation companies charge some fees of their services. Usually the fees are based on the account handled and fees are usually paid monthly. However there are some companies that claim a large fee before actually carrying out your bill consolidation plan. If you have a choice between these two fee options, it is better to opt for monthly fees as some clients may drop out before the completion of the plan.
However, there is a drawback with bill consolidation. There is a possibility of your creditors reporting your use of bill consolidation companies to credit reporting agencies. This may not permit you to open new accounts; however once you make regular payments to your creditors, you stand a chance of improved credit ratings. And with this, you can open new credit card accounts, and even apply for a mortgage within a year.