Non Profit Debt Consolidations

Non profit debt consolidations are helpful to millions of families and individuals nationwide who can't afford the fees attached by for-profit consolidation services. Non profit debt consolidation is just that - not for profit. They are supported by the federal government and through grants rather than by fees. Those that do charge fees, charge minimal ones. Low-income families and individuals trapped by thousands of dollars of borrowed monies can use this finance option to get out their overwhelming financial situation when the alternative is too expensive.

Many such services combine the borrower's multiple loans through a financial management plan. Non profit debt consolidations can't take place without an evaluation of one's income, liabilities and spending habits. The individual requesting assistance will have to provide all of this information to the lender. A counselor will then come up with a spending plan for the borrower. From there, non profit debt consolidation works similarly to traditional lending plans. The counselor works with the creditors and bill collectors on behalf of the debtor, who from that point, never pays the bill collector, only the consolidation service which then turns the money over to the original lenders.

All of this seems like a win-win situation, but there are some downsides to non profit debt consolidations. Any accounts turned over to the consolidation service are closed or frozen while being paid off. Also, the process doesn't put an end to finance charges, but the counselors will work with creditors and bill collectors to reduce interest rates. Some non profit debt consolidation services boast about their ability to obtain even lower rates than for-profit companies. This really depends on the negotiating ability of the service and the creditor's flexibility. Another disadvantage is that not everyone can qualify for this assistance. Although each company is different, the benefits tend to only be extended to those with low income and heavy debt. A simple phone call can clear up any question of their lending guidelines.

Using the services of the non profit lenders can be beneficial but borrowers should use caution. There are many companies out there which claim to be non profit and are not. Before calling a non profit debt consolidation company, make sure that they are bonded, licensed, certified and insured. Be wise and research with the Better Business Bureau to make sure the company has few or no complaints against it. "The heart of the prudent getteth knowledge; and the ear of the wise seeketh knowledge" (Proverbs 18:15). A little knowledge can save a desperate borrower from a scam.

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