Why is Patriot Funding Accused of Being a Debt Consolidation Scam?
Patriot Funding has been reviewed by Crixeo, the popular news and reviews site, for being part of a long-running debt consolidation and credit card relief scam. According to Crixeo:
“The story is the same. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3%-4% interest rate to consolidate your high-interest credit card debt. You will be directed to PatriotFunding com or My Patriot Funding com. More than likely you will not qualify for one of their credit card consolidation loans and they will try and flip you into a more expensive debt settlement product.”
Ed Miles, crixeo.com
When you’re in a lot of high-interest debt, your life seems to revolve around paying them off. It is one of the most stressful and complicated situations to be in. However, you don’t need to let yourself feel hopeless and overwhelmed. There are several strategies that you adopt to pay off your debt effectively.
With the right approach and a deeper understanding of your financial situation, it is possible to turn this difficult situation around. We recommend you also consider the option of debt consolidation, among others. Debt consolidation allows you to combine all your debt into one, and save money in interest over the repayment period.
Debt consolidation streamlines all your debt and makes it easy for you to manage your monthly payments. It makes the entire process of paying off debt more convenient, cheaper, and often quicker.
But before you make any decisions, it’s essential that you understand everything about debt consolidation in detail. That’s where we come in! In this article, we are going to explain everything that you need to know about debt consolidation to help make your decision easier.
How does debt consolidation work?
Debt consolidation can be approached in several ways. Each method has its own benefits and limitations. The method that you choose for consolidating your debt will mostly depend on your needs, debt, and financial situation.
Generally, you’ll need to follow the basic steps as mentioned below:
- Calculate the total debt that you want to consolidate.
- Determine your interest rate by weighted average, based on the interest rate of each debt and your balance. Make sure that the debt consolidation loan you’re looking for has a lower interest rate than your weighted average.
- Document your monthly household and personal budget and find out how much money can you spare for the payment of debt consolidation loan every month.
- When you’ve determined the amount of loan you’ll need, the interest rate that suits you, and the monthly payment that you can make towards your loan, then you’ll be ready to choose the right consolidation method for paying off your debt.
However, it’s important to not rush it, and do your research to explore various options for your paying off your debt. If you have options like debt settlement, you should definitely look into it. Whatever helps you pay off your debt faster at a lower cost should be your top priority. Debt consolidation is an excellent option for credit card refinancing situations when it offers a lower interest, and you are capable of making the monthly payment for the loan.
Let’s explore the two main methods of debt consolidation detcuinail below!
1. Balance transfer credit cards
You can sign up for a balance transfer credit card in order to consolidate your debt. A balance transfer credit card lets you transfer all your credit card balances into a single and low-interest credit card. Most credit card companies offer a 0% interest rate for a set introductory period. Sometimes, credit card companies have promotional offers where they allow you to transfer non-credit card loans to the balance transfer card as well.
Now, let’s breakdown the pros and cons of using this method for consolidating your debt.
Pros of balance transfer credit cards
- Transfers all your debt into a single loan with a lower interest rate
- Makes it easier to keep track of your balance and monthly payments
Cons of balance transfer credit cards
- The amount of debt remains the same.
- The balance is required to be repaid within a set time period in order to take full advantage of a low-interest rate because the rate increases considerably after that period are over.
- If your balance is high, then the transfer fees are also higher, which increases your debt.
- You’ll have to stop using your credit card to make sure you don’t add to your balance further.
Here are some essential tips to keep in mind before opting for a balance transfer card:
- Look for a card that doesn’t charge an annual fee.
- Never ignore the fine print. Make sure you clearly understand the difference between the introductory interest rate and the rate that will apply after it. Inquire about all the associated fees before signing up.
- Determine the balance transfer fee
- Make sure you’re capable of paying off the debt within the special introductory period.
2. Personal loans
Another option for credit card relief is to take out a personal loan. You will use the personal loan to pay all your creditors in one go, and then you’ll only have one loan to keep track of. Personal loans allow you to move your debt to a different creditor and turn multiple payments into a single monthly loan payment.
A personal loan can actually help reduce the cost of your debt by offering a lower interest rate a fixed term. Moreover, if you have a good credit score, you can receive a personal loan at much lower interest. The difference between a balance transfer card and personal loans is that personal loans have fixed interest rates, monthly payments, and the total repayment term.
When you receive a personal loan, you’ll know exactly how much you’ll have to pay every month and for how long. This makes personal a lot more predictable and manageable than balance transfer credit cards. If you can’t pay off your debt within the introductory period of a balance transfer credit card, then a personal loan would be the better choice for you.
Pros of personal loans
- Decreases the interest rate on your loan
- You get current with your creditors.
Cons of personal loans
- The amount of debt doesn’t change.
- You might not get a lower interest rate with a bad credit score.
Final Words
Debt consolidation is one of the most frequently used methods for paying off high-interest debt. If you understand your situation clearly, you can use debt consolidation to your advantage and pay off your debt quicker.