Never Assume That A Nonprofit Loan Consolidation Is The Best Deal

Category: Finance, Credit.

It s no secret that millions of people are literally drowning in debt, and many are desperate for solutions to salvage their finances. One of the major methods provided is loan consolidation of all obligations into one single loan and single monthly payment.

Not surprisingly, they are drawn to television and internet ads and articles offering free information on debt consolidation. The problem with all the hype is that sometimes free consolidation advice is worth exactly what you paid for it! One of the dangers is that a debtor may jump at lower payments and turn unsecured debt into a mortgage loan against their home or other property, and lose everything, get behind again. Debt consolidation can take the form of a secured or unsecured loan. Others who owe don t even have the assets to get a secured loan and can t even choose that option. One protection for this is seeking a nonprofit debt consolidation company for advice and help.

Some lenders will take advantage of the desperation to charge inflated interest and other less than ethical although likely legal means to turn a profit. Again, like not all loans are good deals, not all nonprofits are equally reliable. Never assume that a nonprofit loan consolidation is the best deal. The company may not show a profit but executives may be paid extreme salaries to disperse what would be profit. You must thoroughly investigate them before signing just as you would a for profit company. Don t forget to first inquire of your own bank, since a long financial relationship may help you. If you have student loans, first check out whether you may be eligible for federally sponsored consolidation loans.

If you can find a good source for free debt consolidation advice, there are many advantages. This reduces stress and calls from collectors and helps rebuild your credit. These companies may buy loans at a discount and be able to reduce the total owed, and consolidation means only one payment nearly always less than the total was before, and at a lower interest rate, even unsecured. All of these companies will offer credit counseling and budgeting advice to help understand how to avoid the same mess again. If a company says they" never" consider that, look elsewhere. A legitimate company will be honest when recommending bankruptcy is the only real option as well.

While difficult it is sometimes necessary. About 50 million people in the US are already in credit and debt trouble or on the brink of it, so it is a huge problem. Some firms negotiate debts down for you in addition to consolidation so explore all options. For many, debt consolidation is the likely answer and finding the widely available free advice is a good first step out of trouble. Check credentials and compare the services of several debt relief companies before you choose Ignoring the problem can t work and only makes things worse.

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