Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission. When you consolidate your debts or work with a debt settlement company, you’ll only treat the symptoms of your money problems and never get to the core of why you have issues in the first place.You don’t need to consolidate your bills—you need to pay them off.
Once their fee is accounted for, they promise to negotiate with your creditors and settle your debts. Well, the debt settlement companies usually don’t deliver on helping you with your debt after they take your money.
They’ll leave you on the hook for late fees and additional interest payments on debt they promised to help you pay!
But let’s be honest: Your interest rate isn’t the main problem. This specifically applies to consolidating debt through credit card balance transfers.
The enticingly low interest rate is usually an introductory promotion and applies for a certain period of time only. Be on guard for “special” low-interest deals before or after the holidays.
In almost every case, you’ll have lower payments because the term of your loan is prolonged. You are only restructuring your debt, not eliminating it.
You don’t need debt rearrangement—you need debt reformation.
And now the total loan amount would jump to ,103.
So, that means you shelled out ,282 , although often the terms are used interchangeably.
To do that, you have to change the way you view debt!
Dave says, "Personal finance is 80% behavior and only 20% head knowledge." Even though your choices landed you in a pile of debt, you have the power to work your way out! The solution isn’t a quick fix, and it won’t come in the form of a better interest rate, another loan or debt settlement.
Debt settlement companies also charge a fee for their "service." Often, the fee is anywhere from 15–20% of your debt.