Non Profit Debt Consolidation
If you're one of the millions of Americans seeking relief from credit card debt, take heart - you're not alone. Today, many residents in California and elsewhere are also struggling with unmanageable credit card and unsecured debts, which may be medical bills, department store bills, or even utilities. The good news is, there are a variety of debt relief options available, including debt consolidation, debt settlement, or even bankruptcy.
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One of the most trusted methods of getting out of debt is debt consolidation - the umbrella term applied to a process that takes most or all of your unsecured debts, such as high-interest credit cards, medical bills, store charge cards, gas cards, memberships, subscriptions, etc. and consolidates them under one monthly low-interest payment made to a credit counseling agency. By doing so, you may be able to save what would have been years of making interest-only payments, and you steadily pay off your debt until it's all gone. By not taking on additional debt, and paying off existing debt on a set timetable that you can afford, this provides you with a predictable debt-free day that you can work towards with diligence, discipline -- and some degree of anticipation!
If you've already begun exploring this avenue, no doubt you've encountered non profit debt consolidation options. A note about non profit: Whenever you see non profit debt consolidation loans, non profit debt relief or any non profit debt negotiation advertisement, it's important to realize that non profit tends to only refer to the way a service is structured. Non profit doesn't necessarily mean cheaper, or even better, in the debt relief arena. So don't necessarily gravitate to one option over another simply because it has 'non profit' status; when it comes to debt relief, it really doesn't make a significant difference on how the debt relief service is provided, or the benefits to consumers.
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What Are Debt Consolidation Loans?
There are two types of debt consolidation. The first involves entering into a debt management plan, in which a credit counselor attempts to negotiate lower interest rates on your credit cards, or more favorable repayment terms on your credit cards, medical bills, store charge cards, and other unsecured debts. Proposals are sent out to each of these creditors by the credit counseling agency putting together a debt management plan on your behalf. Those creditors who agree to the proposals will be added to the debt management plan and you as the consumer on the debt program will make one payment each month that gets distributed to your creditors by the credit counseling agency. The second debt consolidation option, debt consolidation loans, doesn't require a third-party credit counselor; they can be obtained through your bank. Debt consolidation loans come in two forms: Unsecured and Secured.
Unsecured loans can generally be taken out for amounts up to $8,000 and may not require collateral to be put down. Therefore, if you have only a modest amount of debt, this may be a good way to go. However, it is important to remember that if you use loan proceeds to pay off debts, you still have the loan to pay off AND unless you are careful, you could end up with a whole new batch of credit cards debts as well. So, in this scenario, your situation can easily go from bad to disastrous, so be careful before proceeding.
Regarding secured loans, these can be taken out for dollar amounts that are much higher, providing that you attach your home or other valuable asset as collateral. As a result of this condition, it's VERY important that you make sure you can handle the terms of the loan; failure to do so could result in your house being repossessed by the bank, not to mention falling even deeper into debt than you were to start out with.
Choosing A Debt Relief Company
If you do decide to work with a credit counselor to reduce your debt, we strongly recommend you first investigate the reviews of non profit debt consolidation companies. Consulting the Better Business Bureau will tell you how long a company has been around, what their overall track record is and what types of complaints (if any) have been levied against them. Only work with people you trust - and then trust that they will be able to get you, and your finances, back on your feet. If you are in debt and in need of assistance, you can get a free debt relief analysis and savings estimate - at no obligation to you.