The Nitty Gritty of Non Profit Debt Consolidation 

With more and more consumers trapped in series of debts, high interest rates, and unpaid late bills, most of them turn to the new-age solution to this problem – debt consolidations. Debt consolidation is a strategy employed by consumers in managing their loans. Rather than paying individual loans each with separate interests, they get another credit line to pay for all of these usually at lower rates. This process is often risky but the outcome still depends on the good judgment and sound decisions of the debtor.

Some non-profit institutions handle consumer debt problems and offer debt consolidation. They help debtors reduce their fees by communicating directly with the consumers’ creditors and promises to free them of their debt in a span of usually less than five years. This system also frees the debtors with the headaches of working or calling their lenders. These companies get the responsibility of checking interest rates and process payments from the payers.  Also, one big catch of this system is the reduction of the monthly payments as well as the interest rates. This would create extra amount of savings as compared to paying everything every month with additional fees. Another advantage is the tax deductions which are not available in usual credit interests. This comes from the interests paid in advance.

However, debtors engaged in this kind of system still find it as a risk not worth taking. Non-profit debt consolidation companies depend upon donations from other people. This becomes the main problem because it only means that transactions are not done regularly simply due to the fact that, of course, donations are not given consistently. Others report that their debt has never really decreased at all after subscribing for debt consolidation of certain companies. Some were even at a risk of being penalized for having late payments because of these companies’ faults. Debtors must be aware that not all non-profit debt consolidation companies are out to serve their clients but their own interests. Some are downright scams so they must be sure that they only transact with legitimate companies lest they be doomed to even more debts and serious liabilities.

The secret to having a smooth credit history is by treating the credit card like money. One must not go and splurge as much as he wants by bearing in mind that by the end of the month there would be a long line of debt waiting for him.