Where can Borrowers with Unsecured Debt Go for Financial Counseling

Borrowers that cannot cope with the loan payments of their unsecured debts can seek help from a credit counseling agency. Credit counselor can provide guide to help you stay on track of your payment. Credit counseling is the solution if you always miss payment as a result of lack of discipline in managing your finance.

Before signing up with a credit counseling agency, you must undergo an initial counseling session so that the counselor can understand more about your financial situation. The initial counseling session will last for 1 hour and it can have follow up sessions if necessary. During the counseling session, the counselor will have a talk with you about your financial situation and what you can do to solve your money problems.

The credit counselor can negotiate with the creditors and persuade them to waive the fees and reduce the interest rate. After a successful negotiation with the creditors, they will set up a plan and you are to follow the plan to make payment to the agency. The agency will then pay your creditors with the money you pay them after deducting the monthly fees.

There are many scam credit counseling organization around so you must be cautious when signing up. The most important thing is that the credit counseling organization is reputable. A reputable organization will be willing to send free information without obliging you to provide information about your financial circumstances. They will usually provide more than one form of counseling services. You should avoid those that offer only debt management plan services. The credit counselor must be able to come up with a good plan in help you to manage your debt. It should not be a shortcut to eliminate your debt.

To start doing research, you can compile 3 or 4 credit counseling agencies. The United States Trustee Program is one place where you can find a list of accredited credit counseling agencies that are qualified to provide counseling on unsecured loans. You can do research on the previous consumer complaints by looking in places such as National Foundation for Credit Counseling, Attorney General, BBB and local consumer protection agency.

You can proceed to make phone calls and ask a series of questions if you don’t find a single consumer complaint that is directed towards the credit counseling company. It is important to ask about all the fees that they charge such as set up fees. It is best to look for a credit counseling organization that is equipped with a team of certified and well trained counselors.

Finally, you must not forget to go through the contract and understand all your obligations before putting down your signature. In the contract, you can find information such as fee, how much of the payment you make every month will go towards paying off the creditors and the estimate time it takes to pay off your creditors.

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  • FAQ for borrowers searching for personal loans in Texas

    How do I decide if a personal loan is right for me?

    A personal loan is a significant commitment. Weigh the benefits to decide whether paying interest for the privilege of borrowing money in advance is crucial. Understanding your responsibilities in addition to the reasons for taking out the loan is critical to obligating your future income to make the payments.

    How does a personal loan affect my credit score?

    Hard inquiries performed by creditors are going to knock a few points off your credit score. You can increase your credit score by making timely payments and never missing a single one. Paying late can affect your credit score and block access to future loans. 

    Do personal loans need collateral?

    Personal loans are generally approved based on creditworthiness. Typically designated as “good faith” loans, the lender won’t need collateral to guarantee that you’ll repay what you’ve borrowed. Although riskier for loan issuers, unsecured loans can cripple your ability to access further credit if you fail to repay to completion. 

    Can I change my payment due date?

    Your payment due date will be set when your short-term loan is approved and will be the same date during the month. You won’t be able to change this pre-determined date. 

    What are the different types of short-term financing?

    Short-term loans, trade credit, overdrafts and credit cards are common examples of short-term financing. Typically, the repayment period is as short as a few weeks up to five years in length. Depending on the type of financing (personal loan, unsecured loan, installment loan) and lenders terms, you will generally find many loans are between six to thirty-six months for repayment.