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Non Profit Debt Consolidation – Should You Use It?

September 23, 2011

Non Profit Debt Consolidation

Consolidating your loans with a non profit debt consolidation company can enable one to enjoy many benefits and peace of mind when it comes to the debt that they have. If you are unfamiliar what consolidation does, well, a profit or non profit debt conslidation company basically allows you to take out a loan from them which you pay off all of your other creditors with.

non profit debt consolidation

This process more times than not equates to you getting a lower interst rate because you are now paying on just one debt, the loan they gave you which is a secured loan, which gnerally have much lower interest rates, as well as fixed rates than the rates you pay to creditors. Many times during this process of non profit debt consolidation, your consolidation companys tries and is often times successful at negotiating a lower debt total which means that the original debt you had will be lowered.

Non Profit Debt Consolidation Benefits

The word non profit right off the bat lets you know that they aren’t out to nickel and dime you for everything that you have, non profit meaning that their goal of operation isn’t funded off making profits off thier customers like for profit organizations are. Here are some benefits you can enjoy my using a non profit debt consolidation service.

  • Being that they are funded mostly by grants and donations for large companies seeking tax write offs, your service fees are going to very minimal to nothing at all compared to often times high fees with for profit organizations.
  • Non profit debt consolidation companies not only try to negotiate the debt total you owe, but will also try to negotiate any late fees, annual interest fees and any other additional charges that come with paying to a traditional creditor.
  • Non profit debt consolidation will allow you to not get calls from creditors anymore because your consolidation provider is the sole communicator with them after you start consolidation.
  • Free advice in the form of money management, creating a personal budget as well as free counseling for any questions that you have pertaining to getting out of debt.
  • Consolidation in general offers longer repayment terms which can allow you to pay lower monthly payments because the life of the loan is longer than what you were paying with other creditors. Although this means that you are going to be paying more interest payments, non profit debt consolidation organizations for the most part don’t charge a fee for paying higher than the minimum, so you can always up the payment later on.
  • As you begin paying payments to your consolidator, and they pay your debt off to your old companies you had debt with, your credit will start to go up significantly. This usually takes place after about a year of payment to your non profit debt consolidation company.

Avoiding Non Profit Debt Consolidation Scams

Although non profit debt consolidation can be an awesome method for eliminating your debt, there are often times scams out there, many in the form claiming the are part of a religious organization among others which can be legit or not at all. The below describes how to spot a scam as well as how to avoid them.

  • There are many non profit debt consolidation companies that boast their free or cheap service and it may look like it in their terms as well but it is far from the truth as these scams actually pay a certian portion of your loan payment to your old creditors for profit. The best way to spot this is to first off, before you fill out any personal information, ask them for proof of non profit which comes in the form of a (501(c)(3)).
  • Also a great way to verify if the non profit debt consolidation company you are thinking about working with is part of one or more of the following; The Better Business Bureau who keeps track of all the good and bad consolidation comanpies, or you can check if they are part of the Internal Association of Professional Debt Arbitrators (IAPDB) and/or The Association of Debt Settlement.
  • Talk to friends, credit counselers, lawyers as well as visit online forums to check if the non profit debt consolidation company you are looking to go with is reputable. (This is optional and can be done while you are doing the above methods).

Above all, don’t go with non profit debt consolidation companies who are offereing miraculous debt solutions like getting out of debt within months or something similiar. Usually if it sounds to good to be true, it probably is. By using these methods of spotting scams, you can pick out the good from the bad and settle with an accredited non profit debt consolidation company that will help you get out of debt and stay out of debt.


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