In my mail box everyday I receive at least one or two mails regarding the debt consolidation companies and services and I always wonder how many people will be taken into these attractive statements without knowing much about the details. The luring claims of these companies include;

1. To decrease interest rate to almost a zero level.

2.50% lessening of monthly payments

3. A security to your company and debt.

If you are stuck into this whole system of unpaid debt these statements would look like a relieving pain killer or an exact ointment on your wounds. But before actually jumping on any of these services let me give a few drawbacks of this whole methodology that will compel you to think appropriately and then decide.

Zero Interest Rate

Well, zero interest rate is not possible humanly, because no fooling is sitting in these companies to let you spend all his money gaining no profit in return. It’s just like you need to have a detailed calculation about the monthly payments you are going to make and the time period. Most of the times you’ll come to know that interest rate are as much as 22 to 25% high. You may be paying less monthly amounts but yeah the duration will be much prolonged.

Payments and their Share in these

You will pay your monthly amount to these debt consolidation companies and then let’s see what can happen to those. First of all you may notice that they are having their share or fees in every payment and ultimately paying the creditor a lesser one. Then some of these companies are even notorious to make late payments or missed payments that will worsen your credit score and your rating for payments.

Balance Transfer Cards

These low interest balance transfer cards re very much into market these days even you can have dozens of them in your pocket. But what is the drawback? You ask for such a balance transfer cards and pay that low interest payments for few days, but after that time this interest rate is diminished and you have to either pay the original interest or even more than that that’ll be devastating.

Negotiating

This is the part they said they are expert in, but actually they are misleading you so as not to involve you in this whole matter. The better option here will be to negotiate with the companies by you so that you won’t have any doubts regarding the payments.