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With all the uncertainty people face today, it’s understandable that some folks will be hesitant to trust companies with their financial future. This issue is even more powerful when you consider the reputation that many debt and credit companies have garnered.

Part of the reason that people are suspicious of debt and credit companies is that for-profit enterprises have a history of acting in their own best interest, not a consumer’s best interest. Therefore, people are increasingly interested in nonprofit debt and credit companies. One area that people have become increasingly intrigued by is nonprofit debt consolidation work.

This article will explain the benefits of using a nonprofit debt consolidation option, list the things you should look for to ensure the best results, compare nonprofit debt relief to for-profit debt relief, and finally discuss nonprofit debt management programs and nonprofit debt settlement programs.

Why Use a Nonprofit Debt Consolidation Company?

There are several reasons why people have begun to nonprofit companies for their debt consolidation and credit needs. Nearly all of these reasons stem from the nonprofit nature of the company, and the signal that sends to consumers.

Consumers are more likely to trust a nonprofit debt consolidation company than a profit company because they see that a nonprofit entity has a greater incentive to act in the best interest of the consumer. Additionally, because profit and money are such huge motivators in our society, the type of individuals who are willing to operate a nonprofit company for debt consolidation are more likely to be interested in actually helping the consumer. After all, the same skills that the nonprofit company uses can be employed to turn a healthy profit as a for-profit corporation.

Nonprofit debt consolidation companies are also usually more affordable. Because they don’t have a profit incentive they can operate closer to their own costs. As a result, individuals seeking debt consolidation through a nonprofit can pay less than individuals using a for-profit debt or credit assistance services.

Getting the Best Debt Consolidation Program

Just because nonprofit companies are seen as more consumer friendly doesn’t mean that every nonprofit company will produce great results for every individual consumer. There are several factors you should consider when selecting a debt consolidation partner to ensure that you get the best possible results for your specific situation.

The first thing you should do when evaluating any debt assistance program is check out online reviews. Previous clients will be able to give you a solid understanding of what the firm was able to do for them, so you can see if anyone was in a situation similar the one you’re in.

You should also look into what the service will actually do for you. There are plenty of nonprofit debt assistance companies that will walk you through things like challenging items on your credit report, but to get the best results you’ll want to find a full-service company. Professionals who interact with the credit and debt industries every day will have a better idea of what strategies work and what doesn’t work when it comes to getting you the best consolidation loan. They may also have industry contacts that let them set up more favorable arrangements for you.

Finally, you should compare prices. Nonprofit doesn’t mean that the service is free, and different companies will charge different amounts. Make sure you consider what kind of services are being offered at a specific price point so you can make an accurate comparison. After all, a service that costs $5 more but does all of the work for you is easily worth the extra money.

Comparing Nonprofit and For-Profit Debt Relief

There are several things that separate nonprofit and for-profit debt relief programs. The biggest difference is the way that these companies are regulated. Nonprofit entities have much more stringent regulations to abide by than for-profit companies do.

These stricter regulations mean that you are much less likely to encounter a scammer in the non-profit sector. In addition to government regulations on the finances of non-profit there is also an organization that can help ensure the company you’re working with is on the up and up.

  • The National Foundation for Credit Counseling is made up of 501(c)3 nonprofit debt relief organizations. Look for NFCC affiliation to ensure that the company you’re considering will work in your best interest
  • Don’t pay any upfront fees – rules and regulations prohibit debt relief companies from charging up-front fees for their services
  • Look into reviews with the Better Business Bureau to see what, if any, complaints have been filed against the company. Also investigate how any complaints have been resolved.
  • Most states have a consumer protection agency. Check with the relevant authorities in your state to ensure the company you’re considering is appropriately licensed.
  • Look for free analysis. Any reputable credit or debt advisor will offer a free analysis of your credit and debt situation before proposing any transactions or steps to take.

Nonprofit Debt Management Programs

Sometimes a consolidation loan might not be the best answer for you. Nonprofit debt management programs can be a good alternative to help manage your debt. These programs will put all of your debt payments into one payment, and will usually auto-debit it from your account. These programs offer lower monthly payments and interest rates, a low monthly fee, and the ability to quickly pay off your debt.

Nonprofit Debt Settlement

Some people have been interested in debt settlement programs. It’s important to note that there are no nonprofit debt settlement programs. A debt settlement option usually requires that you make payments to a settlement company instead of your creditors until you have a substantial amount of money assembled.  The company then negotiates a settlement with your creditors to pay less than you owe.

Because of the way that these companies are structured, they aren’t ever a nonprofit organization. Moreover, before considering debt settlement, you should be aware of the massive implications that seeking debt settlement can have. Talking to a nonprofit credit or debt consoler is a good way to determine if debt settlement is a god option for you.