Free Bills Consolidation Companies

You may have seen advertisements for ‘Free’ debt consolidation services and wondered how they do it.

How It Works

First of all, a bills consolidation company is not a loans company. They will not give you a loan. They do not pay off your old loans for you. If you use their services, they will simply negotiate with your current creditors to assist you in paying back your debts in a more manageable way and often at a lower interest rate.
So rather than having to pay several individual outstanding loans, you pay the one amount to the bills consolidation company, which they then distribute to you creditors according to the payments plan they have negotiated for you.

The Benefit To You

The real benefit to you is the bills consolidation company works with your creditors and is able to negotiate repayment rates that are often significatly lower than you have been used to and so you will notice that the amount of money you have to pay out each month is significantly less.

Pay Your Loans Sooner

Because you are paying less each month for the same debts you were servicing before you consolidated your bills, you will pay them off sooner and that’s got to be a good thing.

Bills Consolidation Companies Charge A Fee

The bills consolidation company will deduct a fee from your monthly payment cheque to cover their services. This is how they make their profit and can afford to stay in business.

Some Bills Consolidation Companies Advertise Free Services

Because you end up saving money by working with a bills consolidation service, the fee they charge you does not really come out of your pocket. Rather it comes out of the money that they saved you.
If over the life of their services, the fees the company charges you add up to less than the amount that they saved you by negotiating to lower your debts, then it is possible for them to promote their services as free.