If you are considering bill consolidation, you might not have realized that there are non-profit and for-profit bill consolidation companies. We are going to take a closer look at non-profit companies so that you can understand your options and how to prepare yourself for dealing with them.
Take a look at this short video for more information on non-profit debt consolidation:
Why should I choose a non-profit bill consolidation company?
The goal of these non-profit services is to help consumers gain control of their finances through a variety of avenues and not necessarily make a profit. Simply consolidating your bills will not solve the deeper issues that led to this financial crisis, and a non-profit consolidator will help you to fix those issues.
Education and credit counseling. They will provide consumers with knowledge that will help them to resolve their financial problems and to start to get their money working for them again. Hopefully, this information will help them maintain a healthy financial status for the rest of their life.
Financial planning. Consumers will meet with advisors who will help assess their budgets and set payment plans for getting out of debt.
Bill consolidation. The company will also assist in consolidating all or most of your debts into one monthly payment, which will result in a lower interest rate and a savings of between 40-60% of all money owed. Many times, a non-profit company will have the ability to get loans for a much lower rate than most lenders, which can mean lower rates and fees for you.
Here is a video entitled “Beware when Consolidating Debt” that discusses non-profit companies and what you need to be aware of when dealing with them.
What type of questions should I ask when choosing a company?
How long have you been in business? There are many companies out there and some of them are scams trying to get personal information or fees, so you need to thoroughly research any company you consider dealing with.
What will be the step-by-step process?
Can you give me a specific date when my debt will be paid off? Any experienced company should be able to provide this information.
Are there any fees that I may incur up front or down the road? If there are fees, find out the exact dates and when you will be required to pay.
What can I expect from a non-profit vs. for-profit bill consolidation company?
If you choose to go with a for-profit consolidation company, you can expect a certain sequence of events. First, you will meet with someone who will evaluate your income and debts. Then you will have to enter into an agreement with them in order for the company to start dealing with creditors on your behalf. Most of the time, they will charge you a monthly fee to do so and a fee up front. You will basically send them one fee every month and they will divide it among your creditors. Each month you will still receive your statements as usual, and you are responsible to make sure that the company is paying your bills on time.
Generally, with a non-profit consolidation company you will not have to pay such a large fee and may not have to pay one at all. You will be required to go through credit counseling as part of the comprehensive goal of getting your finances back on track.
You definitely have choices when it comes to bill consolidation and it is in your best interest to be informed and prepared so that you can make a wise decision.
What can I expect from a non-profit vs. for-profit bill consolidation company?