Find the Best Debt Consolidation in Buffalo, NY

Debt relief programs in Buffalo

When it comes to debt relief, there is no one-size-fits-all solution. The exact debt relief solution you should choose depends on the amount of debt you have and the strategy that fits your situation. Debt relief programs include debt settlement, debt consolidation and credit counseling.

• Debt settlement may be an option if you have a large amount of debt and are falling behind on payments. With debt settlement, a company you hire negotiates with a lender to settle the debt for less. The company negotiates with your lenders as you set aside money monthly in an account. When the debt management firm comes to an agreement with one of the lenders, you can settle the debt using the funds in this account. Although you settle for less than you owe, debt settlement shows up on your credit history for up to seven years.
• Debt consolidation allows you to refinance your unsecured debt into one loan — often with a lower interest rate — with one predictable monthly payment. If you have more than $5,000 in unsecured debt and a good credit score (FICO Score of 670 or better), debt consolidation might be the right option for you. Unlike debt settlement, debt consolidation does not reduce your total amount of debt.
• Credit counseling refers to financial education and support in which a counselor advises you on money and credit management and how to set up a budget. A credit counselor may also be able to arrange a debt management plan (DMP), in which you make one monthly payment to the credit counseling agency, which then pays your creditors.

How much does debt relief cost in Buffalo?

The exact cost of debt relief depends on the strategy you choose.

• Debt settlement services often charge 15% to 25% of your debt amount. Companies may also charge a percentage of the difference between your starting debt amount and the settled amount. Debt settlement programs ordinarily take at least 24 months.
• A debt consolidation loan varies in cost depending on the annual percentage rate of the loan. Most debt consolidation loans have an APR from 6% to 20%. You may also be charged an origination fee that ranges from 1% to 5% of the loan amount. Debt consolidation loans can last from two to five years.
• Credit counseling may include free educational resources and a free introductory consultation, but some organizations may charge fees. A debt management plan, for example, may include a setup fee of $75 or less and a monthly charge of $50 or less.

Buffalo debt relief FAQ

Do debt relief companies hurt your credit score?

Debt settlement is the debt relief program that’s most likely to hurt your credit score because companies often ask you to stop making payments to your creditors. A settlement also stays on your credit report for up to seven years. Taking out a debt consolidation loan may at first hurt your credit score, but as long as you make on-time payments, your score will recover and even has the potential to improve.

What questions should I ask a debt settlement company?

Questions to ask a debt settlement company include the following:

• How long have you been in business, and how much debt have you settled?
• Do you require payment in advance (red flag)?
• Will all of my creditors work with your company?
• Where is my money going while you’re negotiating my debts?
• How long will debt settlement take and how much will it cost?
• What can I expect to happen with my credit score?
• Can I withdraw from the program at any time?
• What are the tax consequences of debt settlement?
• Do you have any professional certifications, like from IAPDA?

Is debt consolidation risky?

Debt consolidation has many potential advantages, including combining multiple payments to creditors into one manageable, convenient monthly payment, usually at a lower interest rate. However, it isn’t risk-free; if you default on the loan, you could be charged late fees, suffer a hit to your credit and face collection efforts.