How to Check If a Consolidation Loan Company is Legitimate

Debt creeps up on you over time. You start with one credit card, and suddenly before you know it, you have five. Then perhaps you got a $400 payday loan to help cover rent or your mortgage. The interest rate on that went up, and now you owe more than $1200 on that loan. Everywhere you look, you are surrounded by debt. In this case, however, you can consider debt consolidation options. It’s a big industry, and just like any other, you need to choose carefully. How, then, do you know what to look for? Fortunately, there are some good ways to judge whether a consolidation loan company is right for your situation.

Look for Online Reviews and Testimonials

It is true that anyone can say anything on the Internet. However, try to read over quite a few reviews and see what the overall vibe is. If they are mostly positive, that’s obviously a good sign. If there are complaints – and there always are – see if the company responded to them. If so, that’s another good indication of the quality of the company. 

Take a few minutes to look more closely at what exactly people are saying. Do they say the debt consolidator is transparent? Are the terms easily and clearly laid out for the customer? What kind of rates are being offered? These kinds of details are often given in reviews, and while your own terms could be different, they are still a good indicator of the type of business you’ll be working with.

Make Sure the Company Is Registered in Your State

The Federal Trade Commission requires that any business offering to consolidate payday loans or other debts be registered in your state. It serves to protect you from scams and gives you the ability to seek recourse in the event of any disputes with the company. Working with a debt consolidator in your state will give you the peace of mind that if something goes wrong with your debt consolidation, it will be resolved easily.

Check with the Better Business Bureau

The BBB is an excellent resource for reviews, unresolved and resolved claims against a company, and general ratings of the business. It also allows you to report a scam and sign up for scam alerts.

Again, if there are complaints against the loan consolidator, pay attention to the details. Was it resolved? How quickly? You can learn a lot about the company’s customer service by looking at the reviews found on the BBB.

Make Sure the Company’s Website Is Secure

Any reputable debt consolidator will protect their customers’ data. This is especially important in the age of online commerce, when hackers are increasingly targeting companies’ websites. You can tell that a company’s website is secure if the URL begins with “https.”

You will be giving the loan consolidator a lot of sensitive information about your finances, so you never want to work with a company that does not value the security of your data. 

Check the Contact Details of the Company and Call Them to Get An Idea of How They Speak to Customers

Make sure the debt consolidator’s business hours, phone number, and email address are laid out. Give them a call and see how they answer the phone. Are they friendly? Do they seem empathetic? You are seeking their help with highly personal situations, so you want to work with people who are compassionate.

Ask them a few questions about consolidating a payday loan or getting an unsecured personal loan. How knowledgeable are they? Do they take the time to answer your questions? If they lack the patience to speak to you, are pushy, or don’t seem to know the answers, you can always try a different company. There are plenty to choose from.

Check Local Listings

It is always a wise idea to check local listings of the company if they are registered locally under the state province. Each local company listing has its own set of categories, but some information you should add is as follows:

Name of business Address Contact information, including toll-free lines, extensions, and fax numbers

Photographs Customer reviews and ratings

Additionally, you should ensure that your business or information is not duplicated online. Frequently, a business owner or assistant will begin a profile, abandon it, and leave the information floating around in cyberspace. When purging these listings, ensure that all incomplete profiles are finished or destroyed.

One Last Word about Consolidation Loan Companies

Take your time and shop around. Get a few quotes on the rates you’ll be charged for consolidating your loans. Ideally, you’ll check with at least three companies. Compare apples to apples, and resist any pressure to make a quick decision. You’ll do what’s right for you and for your loan consolidation, and it will lead to what you most want: a lot of financial pressure coming off your shoulders, leading to a better future.