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The first thing that consumers should understand when considering debt consolidation programs is to understand what the term "debt consolidation" is. Many people mistake it for money or bill payment management or debt settlement. Debt consolidation loans, bill payment management and debt settlements are all different types of debt management programs. Bill payment management services collect payments, whether weekly, biweekly or monthly from the individual(s) and make payments on their outstanding debts. Debt settlement is a service where a company attempts to settle a debt for less than the actual amount owed with specific repayment terms. A debt consolidation program consists of the individual(s) obtaining a single loan to pay off two or more loans, usually at an interest rate lower than what they are currently paying. A debt consolidation loan is usually a loan secured by real estate or other assets.

The individual seeking to obtain a debt consolidation loan should be aware of individuals and businesses purporting to offer a free debt consolidation program or representing themselves as a nonprofit business. In addition, some individuals and businesses affiliate themselves with a Christian or other religious organization. These individuals and businesses advertise free debt consolidation programs as a way of attracting business. This is especially true with regards to people and businesses who use the internet to attract and conduct business. They take advantage of what is called SEO, or search engine optimization, by using the word "free" throughout their web site, thus showing up at or near the top of the search lists of people who are searching for "free debt consolidation loans" or "free debt consolidation programs".

The truth of the matter is that no individual or business can offer a debt consolidation loan or program that is free. It is typical of all such entities to offer a free consultation, including a free quote of loan terms and total costs. However, no one should have to pay any type of fee before actually obtaining an actual loan. The individual looking to obtain a debt consolidation loan should take the time to investigate any individual or company offering any type of debt consolidation program. This is easily done by checking with the Better Business Bureau, either by calling them on the telephone or by visiting betterbusinessbureau.org.

A legitimate online business, such as mydebtmanagement.org, will offer the consumer compete information on all debt management programs regardless if they offer each program. They do this in order to educate and inform the consumer regarding the various programs and the differences, advantages and disadvantages of each of them. When consumers are aware of all of their options and understand what a particular program entails, including costs, they are ready to make an informed decision that is best for them, based upon their set of circumstances.

Finally, always read the entire contract before entering into an agreement with any business. Some unscrupulous people and businesses may enter such terms as to cost the consumer more than they orally understood. In addition, beware of companies that do not offer a physical address or only a post office box. The consumer should also check with an individual's or business' track record in order to determine if they are actually helping people rather than fattening their own wallets with costs that are more than the industry average.

In short, the consumer needs to keep in mind the following: