Their behavior hasn’t changed, so it’s extremely likely they will go right back into debt.
Let’s say you have ,000 in unsecured debt—think credit cards, car loans and medical bills.
You consult a company that promises to lower your payment to 0 per month and your interest rate to 9% by negotiating with your creditors and rolling the two loans together into one. Who wouldn’t want to pay 0 less per month in payments?
But here’s the downside: It will now take you 58 months to pay off the loan.
Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.
That’s why dishonest companies that promote too-good-to-be-true debt-relief programs continue to rank as the top consumer complaint received by the Federal Trade Commission.
Some companies know holiday shoppers who don’t stick to a budget tend to overspend then panic when the bills start coming in.