There are a few reasons why a credit counseling/debt consolidation service can lower monthly payments. The most common way a credit counseling service lowers monthly payments is through negotiations with the creditors. Typically, a credit counseling service strikes a deal with a client’s creditors to reduce or even completely drop their interest rates. Creditors tend to respond well to credit counseling services, as they understand that the client is trying to fulfill their obligations, versus filing for bankruptcy or simply not paying bills at all. Often creditors will offer lower late fees and longer payment terms. Creditors are often more willing to extend beneficial terms to debt consolidation clients so that they can avoid the expense of turning the account over to a collections firm or the even more costly route of trying to recover money through a bankruptcy. Usually, debt consolidation through a debt consolidation counselor results in a positive outcome for both the creditor and the customer who owes the money. Creditors realize that individuals who enter into a debt consolidation program are making an effort to repay their financial obligations.