Paying down debt is never easy, but with increases in inflation and high credit card interest rates (24.66% as of April), it may get even harder. If you’re struggling with debt, a nonprofit debt consolidation agency might be able to help you pay off your debts faster and for less money in the long run.
Here is why you may want to consider a nonprofit credit counseling agency to help you consolidate your debt:
Fixed Payments
Say goodbye to ballooning credit card payments or creeping interest rates. To consolidate your debt through a nonprofit credit counseling agency, you’ll be enrolled in a debt management program. Through this, a certified counselor can work with your creditors to reduce your interest rate and consolidate your credit cards into one monthly payment that stays the same over time.
Quick Repayment
Instead of paying toward your debt and hardly making a dent for the indefinite future, repayment plans through a debt management program are designed to be paid off in three to five years.
No Upfront Fees
While nonprofit credit counseling agencies require a small fee of $40–$75 per month to cover the costs of managing your debt management program, budgeting and counseling services are free.
Alternatives Cost More
Opting for debt settlement companies or bankruptcy will cost you more financially and hurt your credit score. Debt settlement companies typically charge 15%–20% of your settled debt, plus they advise you to stop paying on your debt until a settlement is reached, incurring late fees and penalties. Meanwhile, if you opt for bankruptcy, you may live with it on your credit score for up to 10 years.
Nonprofit Agencies Are Transparent
The best credit counseling agencies are part of the National Foundation for Credit Counseling. Their mission is to promote financial responsibility through financial education and counseling services. To ensure their tax-exempt status, they must make their financial and operating information public to meet state and federal guidelines.
While nonprofit agencies are not the only way to pay off debt, they exist to serve the public, making them beneficial tools for anyone who wants to pay off debt faster, more efficiently, and for less money over time.
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