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Why can't I just negotiate with creditors on my own?
A: In some cases, you can negotiate with creditors on your own to arrange payment or have positive information reported to a credit bureau. However, to get the benefits of lowered monthly payments, lower interest rates, stopped late charges, and waived over the limit fees, you need the professional counselors that debt consolidation loans or services can provide. We deal with for profit and non-profit organizations, and their credit counselors can secure you these benefits not usually available to consumers simply through experience.
Q: Why can't I just keep paying off my creditors on my own?
A: If you keep paying just the minimum to your creditors at the current interest rate, it will take you much longer than if you paid off your debt through our Debt Consolidation Services. A $10,000 debt usually takes 32 years and $24,500 to pay off, if you are paying the monthly minimum of 2.5% of the balance at an average interest rate of 18.5%. This is because you are paying off mostly interest. The actual amount of the debt is only reduced slightly with each payment and in some cases is not reduced at all. Because we may be able to reduce your interest rates, stop over the limit fees, and so on, it will take a lot less time to pay off your debt through us. On average, our debt consolidation clients pay off their debts in 3 to 5 years, depending on individual circumstances.
Q: How much will it cost me to be on a Debt Management Program?
A: Due to the fact that DebtCafe works with both non-profit and for profit organizations that offer many different programs and options this small amount varies from client to client. We do not charge any advance fees for our service or for your absolutely free quotes. No matter what program you decide to go with, our clients find that their own increased cash flow from lower monthly payments, interest rate reductions and stopped late charges more than covers the small cost of the monthly contribution to keep these debt offices running.
Q: How will joining Debt Cafe affect my credit rating?
A1: Do you have a good credit history? If yes, then you should be aware that your credit report may state that you are working through a debt consolidation service. We can't guarantee how future creditors will interpret this information, but we believe that it shows you are trying to get help. Your credit report probably states that you've been carrying balances, made late payments in the past 7 years, or even missed payments, so it may not be as perfect a credit history as you think.
A: If you do not havea good credit history currently, then DebtCafe can only help you. If you make your payments in full and on time, then many of your creditors will "re-age" your account, which means they will show your accounts as current after several payments. In general, if you are paying off debt, it reflects favorably in your credit report. Showing that you are working through a debt consolidation service may show future creditors that you needed help but wanted to pay off your debts in full.
Q: Can I send in more money once I have a better cash flow?
A: Of course - you can always increase your monthly payment. The larger your payment, the faster your accounts will be paid off. Just let the debt consolidation office know you want to increase your payments beforehand so they can figure out which creditors give you the most benefit by increasing their allotment.
Q: Should I pay my bills in the time before I send you my first payment?
A: That's your decision, however we recommend that you do if you can. There is a brief negotiation period of approximately 30 days after we receive your first payment. During this time the office make arrangements for future payments with creditors. If you miss due dates for accounts during the negotiation period, you are at risk of penalties and negative information reported to the credit bureau.
Q: After I pay off one account, can I just pay less?
A: That's your decision, but we highly recommend that you pay the same amount and transfer whatever you used to pay for the other account to another high interest account. That way, as you pay off each account, you end up paying more to the remaining accounts, speeding up the process without changing your monthly spending budget.
Q: Will I still receive harassing phone calls?
A: You might the first several months on the program since it takes time for your creditor's collections department to find out that you're working with one of our debt consolidation services. If you get a harassing call, inform the party to call your account specialist. If you get a harassing call from a collection agency that is not part of your creditor's company, we will provide you with a cease and desist letter. 3rd party collection agents must obey this letter, according to the Fair Debt Collection Practices Act. Make sure that you inform your account specialist if you receive any such calls from a collection agent.