Frequently Asked Questions about Debt Consolidation

Here are the answers to the most commonly asked questions about debt consolidation.

What is debt consolidation?

Debt consolidation is a service that has preset agreements with most major creditors for lowered interest rates.  When you sign up for debt consolidation, the company references its chart of prearranged interest rates with your creditors to determine your new monthly payment.  For most people, this means a drastic reduction in monthly payments and interest rates.

How can I apply for debt consolidation?

You can apply for debt consolidation by clicking “start now” anywhere you see it on our site.  Unlike many of our competitors, we let you apply for a debt consolidation quote for free.  The application will take you only a few minutes.

What kinds of debt consolidation services do you offer?

We offer two debt consolidation services: debt consolidation and debt negotiation. 

Is debt consolidation right for me?

Debt consolidation is most beneficial for people who have very high interest rates (over 18%), have more creditors or bills than they can manage, or would like the convenience of one monthly payment for all of their debts. 

What is the difference between debt consolidation and debt negotiation?

Debt negotiation is a more serious intervention for people who are seriously behind on their payments, have over $20,000 in debt, and/or are in danger of declaring bankruptcy.  Debt negotiation reduces the total amount of your debt, and you then make a lump sum payment to your creditors. 

How will debt consolidation affect my credit?

Debt consolidation does not hurt your credit and might actually improve your credit score by helping you pay your bills on time.  As a condition of debt consolidation, you will be required to cancel all of the cards you include in the program, which can slightly hurt your credit score.  Because it requires you to stop paying your creditors for a time, debt negotiation has an initially damaging effect on your credit.  Some debt consolidation companies also offer credit repair services to help you rebuild your credit after debt negotiation. 

How much does debt consolidation cost?

You can find out how much our debt consolidation services cost by applying for a free quote on this site.  In general, debt consolidation companies will charge a one-time commission plus a monthly administrative fee.  The commission is usually the amount of your first payment to the company.  Monthly administrative fees may be on a flat rate or a per-creditor basis. For more help on becoming debt-free, see our Get out of Debt Guide page.