If you are having trouble with your payday installment loan, there are credit counseling agencies who can help you with debt management plans. These agencies employ debt counselors who are certified and trained in handling concerns about consumer credit, financial and debt management planning and reasonable budgeting. Most of these agencies are non-profit and non-government organizations that provide education and counseling to struggling payday installment loan consumers.
However, due to the increasing demand for credit counseling, there is an increasing propagation of fraudulent credit counseling agencies. According to the Federal Trade Commission (FTC), the nations leading consumer protection agency along with some state Attorney Generals, since 2011, they have sued almost 300 illegitimate credit counseling agencies. These agencies deceive their consumers about the cost, nature, and benefits of the services they are offering and have even lied or misrepresented their nonprofit status.
There are some complaints received by FTC regarding the high fees charged that are not disclosed in the contract. These fees are named “voluntary” contributions but actually put you to deeper debt. Some of these agencies offer little or no consumer education and counseling.
Ideally, when you apply for a debt management plan, you need to send money every month to a credit counseling agency. The agency will use this money to pay off your bills, payday installment loans, and other creditors. Using this process, your creditor may agree to give you lower interest rates and waive certain penalty charges and late fees.
However, some credit counseling agencies do not use the money they are receiving to pay other creditors. So be sure to keep these tips in mind when using a debt management service:
· Contact your creditors and confirm with them that they have accepted the proposed debt management plan before you send any payments to the credit counseling agency which set up the plan.
· Be sure to make regular and timely payments. This is your opportunity to make good on your credit standing. Also, falling behind on your scheduled payments will cause you to have your accounts reported as not current and will incur “late” marks on your credit report.
· Review thoroughly your monthly statements and make sure that your creditors are getting the payments intended for them according to your debt management plan.
· In case you cannot keep up with the scheduled repayment, contact your credit counseling agency immediately. This will help you inform your creditors so they are able to make necessary adjustments. Not paying on time will destroy your goal to pay off your debts along with any benefits you get from the debt management plan such as, low interest rates and fee waivers.
· When choosing the agency to deal with your debt management plan, use these guide questions:
What services do they offer?
Are these services licensed in your state?
Do they offer free information?
What are the qualifications of your counselors?
Are they accredited or certified?
What are their fees?
Do they have set-up and/or monthly fees?
Will you be required to sign a written agreement?
How do they maintain the security and confidentiality of the personal information of their clients?
In times where fraud and scams are increasing, consumers of payday installment loans must be vigilant and watchful. In case of problems, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261 or report to government authorities nearest you.