If you’re looking to pay off unsecured debt, like credit card debt, medical bills, personal loans, or payday loans, working with a nonprofit credit counseling agency to consolidate your debt may help you pay your loans down faster and more efficiently. With inflation on the rise again and credit card interest rates still at all-time highs (24.66% as of April), now is a good time to get serious about paying down your debt.
Here’s how a nonprofit credit counseling agency can help:
Pay Less Over Time
To consolidate your loans through a credit counseling agency, you’ll be enrolled in a debt management program. Your certified credit counselor will work with your creditors to lower your interest rates and consolidate your credit cards into a reduced fixed monthly payment.
Efficient Repayment
Instead of tirelessly paying on loans that never seem to dwindle, you’ll pay off your debts through a debt management plan in three to five years.
No Hidden Fees
Nonprofit credit counseling agencies are required to be transparent. While they charge $40–$75 a month to manage your debt management program, budget and credit counseling services won’t cost you anything.
Positive Credit Score Impact
Bankruptcy stays on your credit score for up to 10 years, and debt settlement companies charge 15%–20% of your settled debt and often advise clients to stop paying on their debt until a settlement is reached (thus incurring you penalties, late fees, and a negative impact to your credit score). Nonprofits, however, help you pay down your loans more quickly so your credit score can recover.
Nonprofits Promote Financial Responsibility
Credit counseling agencies are certified through the National Foundation for Credit Counseling and are required to provide financial education and counseling services. They must also share financial and operating information to meet state and federal guidelines and maintain their tax-exempt status, ensuring nonprofit debt consolidation agencies are reputable organizations looking out for your best interest.
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