1. What is non profit debt consolidation?
Debt consolidation is the process of consolidating all your debts into a one single debt and paying off a fixed amount every month at a single interest rate. You can consolidate your debts with the help of a company that offers the services. Generally, these companies charge hefty monthly fees. There are a few companies that offer non profit debt consolidation services too.
2. Which companies offer non profit debt consolidation?
Non profit companies must get accreditation from BBB and should have received a non profit status from the IRS.
3. What are the services offered by the non profit debt consolidation companies?
The non profit debt consolidation companies will help you to consolidate your bills like any other consolidation company. The company will list your income and expenses, and calculate an amount that you can pay every month for repayment. It will also make a list of the debts that you owe and the name of the creditors. It’s the company’s work to contact your creditors and negotiate a plan with them that fits your budget. This can be done by reducing interest rates , waiving late fees and extending repayment time.
4. Is the service free of cost?
The term non profit doesn’t imply free service. The company may charge a minimum setup and monthly fees. There are a few companies who advertise about voluntary fees but may charge the full fees later, evcn if you can’t afford it.
5. How do I know if the company is non profit?
A non profit company needs to have a non profit (501(c)(3)) status. You can check if the company is non profitable by it’s status. Also, BBB keeps a record of all the companies and you can cross check from there.
6. How do I know I need help of non profit debt consolidation program?
There are times when you feel you can’t manage your finances and debts properly. You may be using a lot of credit cards for buying stuffs and have racked up a lot debts. You don’t know how to pay them off. Collection calls are bothering you a lot and you just want to get rid of them. These are examples of situation where you might need professional help to sort out your finances. You can go for a non profit debt consolidation program to get free of you financial hassle.
7. What are the benefits of the program?
Debt consolidation allows you to pay down your debt by paying off an amount every month. The most beneficial parts of the non profit debt consolidation program is it will cut down interest rates and your late payments can be waived off or minimized. It also calms you mentally. You don't have to take pressure of different debts at different interest rates. You just have to pay in one account at a fixed interest rate. You need not calculate so much.
8. How will I know if the company is fraud or not?
An acknowledged and authorised non profit debt consolidation company will generally analyze your situation and tell you how much to save before making any offer to the creditor. They might also send you free information about their services without asking for your personal information like your credit card number.
However, if the company claims anything mentioned below, beware and check the background of the company twice:
a. They can stop all kind of collection calls
b. They can get your debts paid off for “pennies on the dollar”
c. They have advertisements that promise government bailout program for debt
d. They charge fees before giving any plans to consolidate your debt
9. Will it affect my credit score?
Non profit debt consolidation generally doesn’t affect your credit score. If you pay off your debts timely, it’s going to affect positively on your credit score.
10. What is the maximum time limit of repaying my debt under the program?
Generally, the time limit for repaying debts under non profit debt consolidation program is 3-5 years.de