| By :
William Gabriel
When it comes to paying off multiple debts in a simple and manageable way, many people have looked into debt consolidation, more specifically non-profit debt consolidation as the most effective solution to their debt-related problems. Debt consolidation works by combing all your individual debts into a single one—the consolidated loan—which you now have to pay to the debt consolidation company which provided the loan. Certainly, paying for just one loan streamlines the entire payment process, making the idea of paying all your debts more doable and highly achievable. This is the main reason why such debt consolidation companies have proliferated over the years. Unfortunately, not all debt consolidation companies can actually help you solve your debt-related problems. There are those who are just after your money and are not sincere in helping you pay your debts. Worse, some companies are even illegal or illegitimate, existing simply to scam potential victims. To help you screen the legitimate companies from the illegitimate ones, here are five ways to tell if a non-profit debt consolidation company is legitimate. 1. Check the company’s non-profit status-One of the best ways to screen for the legitimacy of debt consolidation companies is to check their non-profit status. A company is truly a non-profit company if it is duly accredited with a “non-profit charitable organization status” and has the certificate to prove its tax bracket status, otherwise known as the IRS 501(c)(3). You can also check for other signs of legitimacy such as memberships in accredited organizations. 2. Check with government or private organizations that provide accreditations- As an added safety measure, you can also check the local chapters of organizations such as the National Foundation for Credit Counseling (NFCC), which is an organization dedicated to preserving industry-wide standards for debt and credit counseling. All NFCC-accredited companies bear the NFCC seal on their websites. Other organizations to consult include the Association of Independent Consumer Credit Counseling Agencies (AICCA) and the Better Business Bureau (BCC). Aside from these, you can also do added research in the company website’s “About Us” section where you can find information about the company’s history, affiliations, and client testimonials. 3. Check the company fees and charges- All legitimate non-profit debt consolidation companies exist to help you pay off your debts and not scam you with additional fees and charges. Check if they charge exorbitant set-up fees, monthly charges, or initial payments for these usually indicate insincerity and illegitimacy. They will promise to magically erase all your credits in exchange for such fees, but you should not believe these. Remember that debts took years to accumulate so paying these off will also require years of disciplined effort. 4. Check the other services they offer- A non-profit debt consolidation company should also offer extra services such as free debt counseling, debt management solutions, budgeting advice, and the like. By offering extra services, they are able to express their sincerity in helping clients overcome their debts through a comprehensive debt plan and not just by offering a quick debt consolidation loan.
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