Is a Credit Counselling Service Right For Me?

Financial affairs can sometimes get messy, and we often find ourselves in situations we never anticipated. This is particularly true when it comes to debt. Debts can pile up for various reasons, and it might reach a point where it becomes overwhelming. When faced with such circumstances, credit counselling services can be a life-saver. The real question, however, is: Is a Credit Counselling Service Right For Me?

Understanding Credit Counselling Services

Credit counselling services are designed to help individuals dealing with financial difficulties, particularly those related to debt. These services provide advice on debt management, budgeting, and various other financial matters. However, whether credit counselling is suitable for you largely depends on your specific situation.

Evaluating Your Financial Situation

Your financial situation is the first factor to consider when deciding if credit counselling is right for you. Credit counselling services can be beneficial if you need minor adjustments to your interest rates or debt terms to make your debt manageable. However, it’s important to note that credit counselling may not be a feasible option if your consumer debt exceeds $10,000.

Debt Consolidation Loans vs. Principal Reduction

Debt consolidation loans can be an excellent choice for individuals who do not need or want a reduction in their debt principal. However, if you need your principal reduced, then this option might not be suitable for you.

Temperament and Patience

Your temperament and patience level also play a crucial role in determining if credit counselling is the right choice. Credit counselling is not always the fastest way to clear your debt. If you are the patient type and do not mind waiting for several years to pay off your debt, then credit counselling might be a suitable option.

Debt Settlement Programs

If you are not patient and want to be free of your debt within 12-36 months, a debt settlement program might be a better choice. A debt settlement company can often reduce your debt to a level where you will be debt-free within a year.

Time Frame and Cost

Depending on your debt amount, credit counselling might be able to get you out of debt in a similar time frame as a debt settlement program. However, you might end up paying more if you opt for credit counselling since you do not get a principal reduction.

Education and Future Financial Stability

Credit counselling is not just about managing your current debts. It also provides education that can help you manage your finances better in the future. If you are looking for a solution that not only helps you now but also puts you on a stable financial footing in the future, credit counselling might be the right choice.

Choosing the Best Debt Solution

It’s important to evaluate your circumstances carefully to determine if consumer credit counselling is the best solution for your needs. There are various debt relief options available and each one of them has its own set of benefits and drawbacks.