Reduction of interest rate

Creditors' policies regarding interest reduction vary dramatically, ranging from no change to freezing interest. With interest rates typically at 15% to 21%, interest reduction can save a client thousands, and for heavy debtors, tens of thousands of dollars. Obtaining interest reduction on just one or two accounts in itself may warrant enrollment in our program.

When consumers only pay the minimum payment due, liquidation could easily exceed 10 years, and in some situations, the account may never liquidate. This is especially true when late fees, over-limit charges and annual fees are assessed. In reality, the actual interest paid by the typical debtor paying minimum payments is vastly greater than the amounts listed above. The combination of reduced interest and a fixed monthly consolidated payment is the real power of a debt management program. Exactly how much a program benefits and saves a client depends entirely upon the client's mix of creditors, debt and other circumstances.

Creditors typically initiate interest reduction after receiving one to four consecutive payments as arranged by and paid through our agency. The process and time frame varies with each creditor and/or type of account. Be sure to ask the credit counseling organization their policy on reduction of interest rates.

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