Learn About Free Debt Consolidation Quote

If you have done any research online about debt consolidation, you have no doubt seen the countless ads and pop-ups that say "Free Debt Consolidation Quote! Click here for instant credit assessment!" There are so many debt consolidation companies out there, how do you know where to go? How do you know which ones will help you, and which ones are frauds? If they are free, then how do they make their money? How do you know which is the best one for you? Do your homework.

First you have to know the differences between the different kinds of debt consolidation. There are some that use loans and some that don't. If you don't know which type of debt consolidation, just ask the debt counselor that is assigned to you when you call. For the most part they are usually very friendly, and will be happy to answer your questions.

Here is how debt consolidation companies work: You call them and talk to a credit counselor about your current situation. You work out how much you owe, how much money you make, how much you spend, what you can afford to pay, what your bills are, etc. They make financial recommendations about what you can do to change your current situation. Sometimes they suggest a second job. Sometimes they suggest cutting back on certain expenses that are not necessary, such as that weekly trip to the casino. They do their best to tell you how to get back on your feet without outright saying. "Don't do this. Don't do that." They then look at how much your debt is, how much money you have coming in, and how much money is being spent on essentials. Then they take your debt and split it between eighteen to sixty payments depending on how much debt you owe and what you can afford to pay each month. If you can afford to pay that bill, then they try to set it up for you so that you can pay off your debt.

OK, so now what's the difference between the companies that use loans and those that don't?

Let's say you contact Debt Company Blabity-Blah to get a free debt consolidation quote, and they end up working with you on your debt. You owe $10,000. They get you a loan of $10,000 with a 12% interest rate. They use the loan to pay off your debt. Now instead of having 10 credit cards with interest rates ranging from 18%-25% that keep tacking on late fees and over the limit fees that you can't afford to pay, you now only have one bill to pay every month. 12% is lower than all the other fees you had to pay, and now all you cards are paid off!
The companies that don't use loans work the same way, but instead of using a loan, the payment they receive from you is used to pay off all your creditors slowly.

Both will argue that their way is better, and they both have their good points. You just have to decide which is best for you.

But that still doesn't tell me how my quote is FREE!

Debt consolidation companies are usually nonprofit so they can offer a free debt consolidation quoteThey rely on donations, usually made by creditors, to pay their staff and their bills. They will usually ask those who use their services to make a monthly donation which is added into the monthly payment. These are voluntary and are not required. These donations are what make using the company free.