Vance P. Truman, Attorney at Law
Putting People's Financial Worries Behind Them Free Initial Consultation

Don't fall for a debt consolidation loan racket

Most people don't have a clear understanding of exactly how debt consolidation loans work. Having this information can help you avoid ending up in a worse financial situation than you are in currently.

When a company provides a consumer with a debt consolidation loan, they're really buying your debt from your credit card companies and other creditors. This rolls your debt into one bill, which is sometimes lower -- with a lower interest rate -- than what you may have been paying on all of your credit cards together.

Unfortunately, there are a lot of scam artists that prey on people in desperate financial straits. Some of these people pose as debt consolidation lenders. Companies may pop up overnight and disappear again or operate overseas in order to skirt the law.

What are the signs that a bill consolidation lender is a fraud?

  • There are negative reports at the Better Business Bureau and other online review sites.
  • A representative guarantees you that the loan will be approved.
  • You are pushed -- hard -- to commit to the loan if you hesitate.
  • The lender guarantees you that this will fix your financial problems.
  • There doesn't seem to be much evidence required of your ability to repay.
  • You are required to make a payment to the company before your loan begins to show "good faith."
  • You are required to set up automatic withdrawals from your bank account.
  • The company operates from a post office box and not a physical address.

All of these are individually a bad sign. Any of them together should automatically cause you to walk quickly away from the deal and stay away.

Most of the time, a loan that just shuffles your debt around can't relieve your financial problems if you simply owe more than you can afford to repay. At that point, it's often smarter to discuss real debt relief solutions with an experienced attorney.

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Medina, OH 44256

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