Non-profit debt consolidation companies are those companies that work along with your credit card company to get you out of debt without you having to take another loan. The non-profit consolidation companies negotiate with the credit card companies aiming to reduce your interest rates. This will, in turn, reduce your monthly bill. These Debt consolidation companies take monthly payments from the consumer and distributes them to the credit card company at a rate that is negotiated between the two parties.
How to Choose the Best Non-profit Credit Consolidation Program?
To choose the most suitable consolidation program you have to keep certain things in mind. These points are mentioned below-
- The best consolidation program is one where you do not have to take another loan to clear your pending debts.
- As these debt consolidation firms are non-profit organizations, they will not charge a penny for their services. If any firm asks for any kind of fees, that is not the best non-profit firm for you.
- A Credit consolidation program is a debt management plan that will offer you the most suitable and affordable debt relief solution according to your financial situation.
You can find the perfect debt consolidation company if all these criteria match. You can also search online and even take help from online credit counseling services to find the best debt consolidation company for you. The online counselors will help you to get you out of your debt problems while identifying the actual reason behind these problems.
Moreover, these online counselors will also help you make a personal budget plan that suits your requirements keeping your income in mind. By adopting this plan you will be able to increase your savings. This plan will also help you to keep track of your monthly repayments so that you never miss any.
How will a Debt Consolidation Company Help You with Your Financial Situation?
A debt consolidation company will make a customized debt management plan for you. This debt management plan will help you in-
- Paying off all your debts in due time. In most cases, the person becomes debt-free in 3 to 5 years.
- Consolidating all your credit card bills and other loans into one easy monthly payment.
- Minimizing your interest rate without taking your credit score into consideration.
- Removing all additional charges like late fees and added interest rates on overdue.
- Managing all your finances by building a realistic budget plan according to your income and affordability.
- Keeping track of your loan repayments.
Difference between a Non-profit and a Normal Debt Consolidation Firm
- All non-profit Credit Consolidation companies are registered under the NFCC (National Foundation for Credit Counseling). Therefore, if you check the NFCC affiliation of any Debt Consolidation company you will automatically understand whether it is a non-profit organization or not.
- None of the Non-profit Credit Consolidation companies take any fees for the services they provide. If any of the Debt consolidation companies are charging any amount from you in the name of service charge or any other additional charge then those firms are not non-profit organizations.
- Several people filed complaints against many of these debt consolidation companies. These complaints are mainly filed because of their poor service or lack of commitment. Therefore, while selecting the best non-profit organization, you can check for these registered complaints. If a firm has many complaints against it, it is advisable not to select that company.
- Check whether the Nonprofit Credit Consolidation company you want to consult has the proper license to work in your state. You can also collect information about their criminal records or are there any ongoing investigations for this company.
- Any Non-profit Credit Consolidation company will offer you free counseling on your financial status and how to improve it. They will also make a budget plan for your expenditure at free of cost. But normal Debt Consolidation programs will take charge for all their services including these budget counseling sessions.
Features of a Non-profit Credit Consolidation Company
All Non-profit Credit Consolidation companies have similar features and provide similar benefits to their clients. Here, we have made a list of some of the best features of a Non-profit Credit Consolidation company-
- Provides low-interest rates on the registered debts.
- Non-profit Credit Consolidation companies offer an affordable monthly payment option for all your repayments.
- Negotiates with your creditors on behalf of you to agree for a settlement amount that is lower than your actual debt.
- All your consolidated monthly payments are already debited.
- You are likely to become debt free in 3 to 5 years if you have opted for the services of a Non-profit Credit Consolidation firm.
What is a Non-Profit Debt Settlement?
There are several Non-profit Credit Consolidation companies but you will not find any Non-profit Debt Settlement company. Under a debt settlement plan, you will not have to repay your debts to your creditors. Instead, you have to make deposits in a savings account on a monthly basis. When your savings account has enough money to clear your debt, the debt settlement company officials will contact your creditors and negotiate with them on behalf of you.
They will convince all your creditors to settle for a final payment which is less than your actual debt amount. If your creditors are convinced, you can repay their debt from the amount you have reserved in your savings account. But after all your debts are cleared, you will have to pay a fair share of the amount to the debt settlement company for its services. This fee will be deducted from the original debt amount you owed. There are no Debt Settlement companies registered under the National Foundation for Credit Counseling. But you can take help from a credit counseling company on this process of a debt relief program.