Non-Profit Debt Consolidation - Ohio
In these tough economic times, credit card debt has, sadly, become a part of life and caused many residents in the Buckeye State as well as consumers elsewhere, to seek methods of relief such as non-profit debt consolidation. If you are also experiencing financial hardships and are barely managing to get by from paycheck to paycheck, you may be interested in finding out how much savings you can potentially get by consolidating your debts.
A popular form of debt relief, debt consolidation, or a debt management plan (DMP) allows you to make one, consolidated, and more affordable monthly payment to a credit counseling agency. These days, it has become relatively easy to find a reputable consolidation company - either "for profit" or "non-profit" - to help you manage your credit card debts and other types of unsecured debts (like medical bills, department store charges, or utilities). Another option available for many consumers is a debt consolidation loan, where you can pay off your credit card debts with one, lower interest loan.
These days, many consumers have made these options popular alternatives to bankruptcy, which has a more damaging and longer lasting impact on your credit. If you want to find out your debt relief options, answer a few, simple questions to get a free debt relief analysis and savings estimate.
Risks of Debt Consolidation Loans
As mentioned earlier, debt relief has helped many consumers reduce their credit card and unsecured debts, and in some cases, may even help those with bad credit get their finances back on track. If you are also struggling with unmanageable debts, one option available is a debt consolidation loan. Debt consolidation loans typically involve combining high-interest credit card debts and other unsecured debts into one lower interest loan.
However, a debt consolidation loan should not be confused with non-profit (or for profit) debt consolidation through credit counseling because a consolidation loan involves taking unsecured debt and paying it off with funds via a "secured" loan. This means a loan where you would have had to put up your home or other asset as collateral.
Here is where a debt consolidation loan can present a new challenge. Many consumers who get approved for debt consolidation loans typically do not have the discipline to stop using their credit cards, and eventually, they start accumulating new, high-interest charges. As a result, many of these consumers end up having to deal with new credit card debts on top of their personal loan.
Why Debt Consolidation May Be a Better Alternative
Debt consolidation through credit counseling, on the other hand, is a fundamentally different form of debt relief than debt consolidation loans. What debt consolidation involves is combining, or consolidating, your high-interest credit card and unsecured debts into a single, more manageable, and more structured monthly payment made to a credit counseling agency.
When you enroll in a debt consolidation program, credit counselors review your outstanding debts, finances, and overall ability to pay your debts. When they have a clear picture of your financial situation, credit counselors will generally develop a game plan that can help you reduce your debts. What this typically involves is submitting proposals, on your behalf, to individual creditors asking for reduced interest rates, or the waiving or elimination of late fees and other penalties. Creditors that agree to these proposals are then placed into the debt management plan.
The goal is to get you on a single, more manageable, and more structured payment plan so that you can manage your debts sooner than if you only continued to make the minimum monthly payments at higher interest rates. Unlike debt consolidation loans where there is a risk of accumulating new charges, a debt consolidation program can provide you with a more affordable and more predictable payment plan that is designed to help you pay off your credit card and other unsecured debts at a pace that you are comfortable with.
Understand the Pros and Cons
The bottom line is, regardless of the debt relief method, non-profit debt consolidation, debt consolidation loans, or even bankruptcy - it is wise to understand the pros and cons of each, understand how long it will take for you to realize your savings, and the potential impact to your credit. Take the time to do your due diligence when choosing a debt relief service so that you can be well on your way to reducing your debts.
Compare your debt relief options. Request a free debt relief analysis and savings estimate. - start here.