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Debt Consolidation | Debt Articles


Non Profit Debt Consolidation

If you’re shopping around for a loan, you’ll may have encountered companies who describe themselves as non-profit, and also provide consolidation services such as loans. As with any borrowing, you should check as far as possible the credentials of a company you’re considering applying to for a loan, and bear in mind that much of the marketing you’ll see will be intentionally misleading..

Who?

Despite this, there are a small number of organisations who do indeed offer non-profit consolidation services and that are above board. Some of these operate as charities, and receive funds from the state, from donations and in turn from other creditors.

Naturally, you need to ask yourself where the funds are coming from if a company is offering you lending despite not making any profit from it themselves. However, a reputable organisation will be able to provide you with extensive information about how and why they work this way.

not for profit

Reasons

In some cases, the organisations that offer these services are working within the bounds of some wider philosophy such as a religion or faith. One example of this that you may see is Christian Debt Consolidation.

This tends to work on the basis that living in debt is seen as not in accordance with Christian morality, and a consolidation loan is being given as a tool to not only get you out of debt, but to help you to change your spending habits in general and stop living ‘beyond your means’.

As always, check the terms and conditions of any loan thoroughly, whether the company is non-profit or not.

Loans

The consolidation processes used by non-profit organisations typically work the same way as the standard ones. They may therefore offer a loan that you can use to pay off your debts and then pay back to them over a set period.

Other approaches

In some cases, a non-profit organisation may help you to consolidate your debts by setting up an arrangement whereby you pay them an amount each month instead of your current creditors, and they then pay the funds to the creditors in turn. This basically means that you’re still paying the debts, but indirectly and by making one payment instead of several, with the organisation handling the details.

Often, an organisation offering non-profit debt consolidation will do this in conjunction with other financial services, such as counselling and debt management in general