Having been in the debt reduction business for roughly the past ten years now, we have yet to come across a company (for profit versus not for profit) that offers anything different in our opinion, regarding non profit debt consolidation loans. Sure the term “non-profit” sounds nice, however some of the richest companies in the world are “non-profits.” Just take a look at the America Red Cross or the Consumer Credit Counseling agencies. Just because a company hangs out a sign that says non-profit, does not mean it is any better or any worse than a for profit company. In fact a for-profit company will probably work harder for you.
That said, we have done some investigation in the non profit debt consolidation business. These companies are often thought to be only focusing on debt consolidation, however our experience has shown this is just one of the many services that they offer.
As discussed in other articles on this web site, we believe that debt consolidation loans are only good for a select few people, and should ONLY be used when consolidating secured debt; never unsecured debt. People that are looking for a way to consolidate secured debt (houses, automobiles, student loans etc.) may benefit from a debt consolidation loan if some of the below items were in place. For example:
What is the interest rate on the new loan? Does it start with a teaser rate of 0% interest rate that expires after a certain length of time (usually 6-12 months)? What would happen to that rate if an emergency came up and you unfortunately missed a payment? Does the rate jump to 20% or more? Finally, what happens at the end of the “teaser rate” term? What is the interest rate at that point in time.
These are the questions you want to be asking more so than if a company is non-profit versus for profit. Something else to consider is that non-profits usually want to “sell” you other services as well, such as financial planning services, investment advice or debt counseling programs for an additional fee, in addition to the debt consolidation loans. Most of these programs can be found on the Internet for free anyway. Beware!
In conclusion then, ONLY use a debt consolidation loan, if you need the loan to cover secured debts, such as student loans. If it is for unsecured debt, use a debt settlement company such as Nationwide Debt Reduction, that will negotiate and settle you debt for a fraction of you owe, both morally and ethically.