Free debt consolidation is a misnomer that does not really exist. These services might be provided at lower than normal charges, and the charges are minimal so as to be a non-issue. Hence, they are called free grants.

Creditors pay these companies a part of the loan as commission generally, to maintain these services. Hence this is not then charged from the debtor. It is normally seen that the consolidation companies charge the debtor a flat fee for these services. At times they also charge a commission. These charges are generally based on factors such as, the credit rating of the debtor as also the volume of debt, and the amount of loan that is being arranged.

The free debt consolidation does not involve such fees, except an insignificant flat fee from the debtor. By hiring such a free debt consolidation service, interest rates are further reduced, and are helpful for the debtor.

There are several non-profit organizations that help debtors by providing credit counseling. These organizations also help individuals to handle their debts. Grants are available from certain Federal Government agencies, and other organizations but they are generally meant to achieve certain goals. There is a plethora of web sites on the Internet that guarantee government grants for their customers. The Federal Trade Commission has warned against such advertisements. Government or organizations give grants, usually for the betterment of the community, society or people at large.

It is very difficult to get through the formalities to find out if you are eligible for such loans and grants. There is no government program that offers grants for personal debt repayment, or any program that provides money in the form of debt consolidation loans to an individual. It?s very difficult to find an organization that is interested in giving grants to pay off bills and credit card accounts.

It is important to be careful and wary about fraudulent companies, when choosing a free debt consolidation service. It is better to check and verify the credentials of such companies before approaching them.

Free Debt Consolidation provides detailed information on Free Debt Consolidation, Free Debt Consolidation Services, Free Debt Consolidation Quotes, Interest Free Debt Consolidation and more. Free Debt Consolidation is affiliated with Online Debt Consolidation Loans.

Debt Consolidation FAQ:

Question: Does a debt consolidation loan effect your credit?
I have heard that this is not a good thing, or that lenders do not like to see this. I am sure it does not impact my score though. Someone please set the record straight.

Answer: The short answer is Yes. Only do this if it is necessary to avoid going delinquent and you are achieving a much lower rate.

Question: How does debt consolidation affect your credit score and rating?

Answer: A consolidation loan is money borrowed from a lender secured or unsecured. The money from the lender will totally pay your credit cards off 100% consolidating all of your credit balances. Does not ding your credit.

I hear people use the word consolidation in reference to consumer counseling or settlement. This is not true consolidation. What your really doing is consolidating the payment and not the balance. Dings your credit.

No matter what anyone tells you, anytime you do any less then pay your creditors 100% your credit will take a hit. For some it is worth it for others it is not.

Question: I don’t have a diverse portfolio of debt, I do not have a mortgage, could a debt consolidation loan help?
I just have a lot of credit cards but no other types of debts really.

Answer: Possibly, but I wouldn’t recommend taking your unsecured debt and securing it with any of your property (like a car for instance). I also generally do not recommend consolidating onto another credit card as this often leads to climbing balances and greater debt. Perhaps a personal loan is the way to go.

Question: Where can I get a good low interest personal loan (unsecured) for debt consolidation?

Answer: If you have a good job or repayment plan, you can ask for a loan at your
credit union.

Question: Are collection and debt consolidation attorneys worth it?
I have bad credit but it seems like old bills keep coming back to haunt me from when I was younger…I need someone to dispute my debts, a judgement and help by consolidating?

Answer: The debt consolidation people are NOT worth it. When I get a letter from those people on a past due account at my office, I throw it away. Finance Companies DO NOT have to accept what they offer. The best way to handle your situation is this…pay off each account 1 by 1. Call the companies that you owe and try and set up arrangements. Most people will work with you if they see that you are willing to work with them.

Question: How can I get a debt consolidation loan with bad credit?
I am willing to make the payments via bank draft.

Answer: If you’re considering a personal loan to pay off the debt….don’t. It’s a very bad idea. Think about it, why would you want to replace one debt with another? You weren’t successful paying off the the first set of debts so why would you think you could pay off one big one? The point is to eliminate it entirely, borrowing more money to pay off other money you don’t have is not the solution. You need to speak with a credit counselor who can negotiate a lower debt and reasonable repayment terms on your behalf. They do work, and they are a much better solution to taking on more debt.

Question: Are these consumer debt consolidation companies a better alternative to bankruptcy?
The recession has caused many consumers to cut back on monthly spending. Carrying a monthly balance seems more like a luxury than a necessity.

Answer: Its better to avoid both if you can figure out a budget. But if you have to pick one or the other, consumer debt consolidation is a better alternative. Declaring bankruptcy can keep you from getting any credit for many years. Check with the loan officer at your local bank and they will tell you the pitfalls of both.

Question: Does anyone know of a reputable debt consolidation company in CT?

Answer: You do not need a consolidation company — you need to down size your lifestyle and sort out the bills and work through this yourself.