Is there such a thing as free credit consolidation? No. Of course not. No one is going to give you a loan for free. You’re going to have to pay for one way or another. Credit consolidation works the same way as any other loan. The lender makes money off the interest you pay.
That is because it isn’t free doesn’t mean that credit consolidation is a bad idea. In some cases it can be a very financially wise way to get out of debt. Beware if people try to tell you it is free. Just because it doesn’t cost you any money upfront, does not mean it is free.
Like many loans free credit consolidation can roll the fees into the loan itself. That doesn’t make it free, but it does mean you don’t have to bring any cash to the table. If you’re strapped for finances, this may be the difference between being able to consolidate your loans and not.
As with anything you must have financial literacy to understand your free credit consolidation offer is actually beneficial. Read the fine print. Do the calculations. Don’t sign anything until you understand exactly what it means and exactly what you’re committing to.
People are offering to consolidate your credit in order to make money for themselves. It isn’t something they’re doing out of the goodwill of their hearts. It’s up to you to understand the details of what you’re committing to.
Be particularly wary of companies advertising free credit consolidation. It’s fine if they say there is no fee upfront. It’s fine if they explain exactly how their fees are rolled into the life of the loan. But if they keep emphasizing the idea that you’re getting a loan for free, chances are they may be trying to scam you.
Comments on this entry are closed.