Today their are many debt relief programs available and people offering debt relief help on the internet. The trouble is many people don’t know much about these companies, this is especially true with the fees they charge.
In fact many debt relief companies look good but you might be surprised to see what kind of fees they are really charging. So in this article I’m going to cover the two different fees typical debt relief companies will charge.
Monthly Fee
The most common fee debt companies will charge is a monthly fee. However this fee isn’t entirely paid to them, but rather this fee is similar to a mortgage payment.
When you get started into the debt plan they will combine all of the debts that enter the plan into one single payment and then like a mortgage take a portion of that payment for themselves.
You might be wonder if a portion of this payment goes to them who is paying your creditors? The answer to that is sometimes creditors may get neglected up front in order for the debt company to cover their fees.
The typical debt relief company will charge around 15% to 17% of the total debt you have in the program. So if you have $25,000 of debt you could essentially pay out up to $4250! In my honest opinion if you would have an extra four grand you would be much better paying off the debt yourself.
Up Front Fee
Finally, as if that isn’t bad enough some companies will charge an up front fee just to enter the program. You might be wondering why would they charge you to get into the program?
The fee is collected to pay for their representatives to call and negotiate a deal with your creditors. I should also mention that every company does this different but the thing I’ve notice about most of these companies is that none of them will show you in black and white what they really charge.
In Closing…
In closing it’s obvious some of these companies don’t want you to really know what they are charging. The best advice I can give you here is to do your homework and find out up front what kind of fees they charge before you join the program.
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