Online Debt Consolidation Services

As financial distress continues to increase, many individuals seek the help of a debt consolidation service provider.  The speed and convenience of the Internet has facilitated a shift to online debt consolidation services.  Reducing or eliminating debt can be a risk-filled undertaking.  Making an informed decision can save you money over the long haul.

Finding an Online Debt Consolidator

In this publication, we're going to discuss the pros and cons of working with an online debt consolidator.  That discussion will include the factors to consider before working with an online service provider.  We'll finish with a short list of organizations that can help you to find a reputable debt consolidator.

Warnings about Debt and Money

There is an old proverb that dates back to the 1500s:  a fool and his money are soon parted.  In the marketplace today, there are debt consolidation services providers that are solely focused on money, your money.  While at the same time, the Internet and World Wide Web have made it extremely easy for individuals, small companies, and large corporations to offer online services such as debt consolidation.  That's why it's so important to be able to distinguish between a good and a bad provider.

Online Debt Consolidation Websites

When it comes to debt consolidation, there are three types of websites offering these services:  the good, the bad, and the ugly.  We're going to start at the bottom of this list, and work our way up the ladder to the good ones.  While we're at it, we'll offer you some warnings, and tips, so you can hopefully separate the good from the bad.

Debt Consolidators to Avoid

The "ugly" sites are those that are really just after your money, and not concerned at all about putting together a plan that will help to get you out of debt.  These companies will be asking you for large up-front deposits, or fees, in exchange for cleaning up your credit report.  So here is our first tip.  If an offer sounds too good to be true, illegal, or unethical, then it probably is...

Ignorance is not an excuse in a court of law.  If a company can convince you to pay for a service that sounds illegal, then what is your recourse against that company if they don't provide that service?  Are you going to go to court and tell the judge that you paid someone to do something illegal and they stole your money?  That's not going to happen, so it's best to avoid this path altogether.

In addition, when you're dealing with online sites, it is very difficult to tell exactly where they are operating (Russia or the United States).  If you know how to do it, a website can be hosted for less than $10 per month.  Domain names in bulk cost less than $4 each.  So with an investment of less than $15, a site can appear one day and disappear the next day with little recourse for the unsuspecting consumer.

Debt Consolidators to Watch

The second type of debt consolidators you may find online is websites that are affiliates of larger operations.  Affiliate sites are operated by individuals that advertise to consumers, and then send the sales lead on to the company that will write the consolidation loan.  This is a niche industry that has emerged due to the widespread access to online communities.

Successful affiliates are expert at marketing and finding debt consolidation candidates, but they do not have the financial resources to actually write a loan.  By sending the sales lead to the lending company, the affiliate earns a commission, just like a salesperson.  As a consumer, you need to be careful when dealing with an affiliate.  In the name of marketing, they can often make promises they cannot keep.

There are two relatively simple ways to identify an affiliate debt consolidator.  The first is the lack of a street address anywhere on the website.  The second way is to find their toll free number, if they have one, and do a search on the telephone number in a search engine.  If you find many different websites with the same telephone number, then it's probably an affiliate you're dealing with.

Best Online Debt Consolidators

It is very likely that the best online debt consolidators are those that also have a physical presence.  That is, they are a brick and mortar company.  They might be a subsidiary of a bank, or a standalone company that's been providing debt consolidation services well before the online community evolved.

There are also two organizations that provide lists of debt consolidators that you can access online.  You can also find quality non-profit debt counseling member companies by searching the National Foundation for Credit Counseling or NFCC website.

If you're looking for a professional debt counselor, then you can search for information on the American Association of Debt Management Organizations (defunct as of November 2010).  These two websites apply some quality measures to the debt consolidation services industry, and often refer you to local or state agencies that maintain lists of qualified debt counselors in your area.  These sites offer the consumer a much higher chance of finding a counselor or debt consolidation service that adheres to ethical practices.

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