A credit counseling agency is actually much more than a mere counselor; they are your companions on the path of your getting free from debt. They have to be with you every step of the way, guiding and assisting you in becoming debt-free. In fact, how soon you become free from your indebtedness will depend on which credit counseling agency you have chosen.
In order to help you in selecting the right credit counseling agency, we enlist the functions that they ought to perform. Here they are:-
Understand the financial situation properly.
Everyone's financial problem is unique. Even when you are talking about something particular like credit cards, there are different factors that need to be taken into the picture. That is why the credit counseling agency must hear out the problems of their clients completely. They must understand all the factors involved in their singular problem.
Prepare a monthly budget plan.
Just as everyone's financial problems are different, everyone's income capabilities and sources are also different. The job of the counselor is to make a list of all the sources from where money can be pooled in per month, and a list of all the outgoings involved, not just the credit card bills. There must also be some relief for contingency expenses that are sure to crop up month after month. The agency must chalk out this budget plan for their clients, because if the clients were able to come up with a plan themselves, they would not have been in this financial problem in the first place.
Provide suggestions for solving the credit debt.
Next on the agenda are the suggestions that the counseling agency must provide to the clients. They must tell of all the options that are possible for solving the indebtedness. They might suggest things like refinancing a loan to avail of lower rates of interest. They might also suggest consolidating several loans that the clients might have into a single loan, payable to a single lender at a reduced rate of interest. Or they might even suggest borrowing a loan in lieu of an asset they have, like home equity, in order to pay off their high credit card debts (home equity loans are always at a lower rate of interest than credit card payments). These suggestions are not something that a layperson can think of him-/herself. That is why it is the duty of the counselors to suggest these ideas.
Offer their services.
Every credit counseling agency must have services for the suggestions they provide. For example, if they suggest clients to consolidate their loans, they must provide the consolidating services too. They must explain to their clients what consolidation actually means, how much they will have to pay as charges, and how much they will save at the end of day.
Thus, the counseling agency has a huge responsibility - it starts by understanding the problems of the clients, then makes proper plans for them and finally implements them. They are present throughout the process of credit debt solution for their clients.
