Consumer counseling credit card consolidating credit debt
If you do not make an on-time payment, you risk losing the reduced monthly payment benefit.You do have the option of paying more towards your debts on the plan, which would help you finish early.You contact a credit counseling service, typically over the phone, and walk through a simple budget analysis with a certified counselor.This will consist of questions about your debts, regular monthly bills, and your income.Using an average of 2.1% of your total 22k debt as your new monthly payment for these 5 accounts, you would pay a fixed 2.00 every month until your debts are paid off in full.You can quickly add up all of your unsecured (credit cards, store cards, gas cards, etc.), and use the above 2.1% calculation to see how much you could save each month by working with a credit counseling agency.This does not impact your credit score, but it can affect the way your credit report is viewed by people who look at it in order to lend to you.
Your monthly payment is set up as an auto-draft from your personal bank account for the same day each month.When you enroll in a debt management repayment plan with a credit counselor, your accounts will be permanently closed by the credit grantor.Closing accounts can have a slight impact on your credit score (dropping only a couple points).If you want to be proactive you can close the accounts yourself before you enroll with a credit counseling company.
The accounts that you enroll in the credit counseling plan may appear on your credit report as being enrolled in a managed repayment plan.
Nonprofit credit counseling services will waive the monthly fees in some instances if you fit a certain criteria.