Payday Loans Debt Consolidation

Does A Non Profit Payday Debt Consolidation Agency Offer Free Services?

It is a common misconception that a non-profit payday debt consolidation agency offers free services. It is just not true. Just because a company is doing its business with a ‘non-profit’ tag, it does not necessarily mean that they will not charge anything to you for their services. In most cases, you have to pay a fee if you sign up for a program offered by them. Besides that, there are also several unscrupulous companies out there that claim to run their business as a non-profit organization, but in reality, they try to take undue advantage of your financially vulnerable situation and their services can prove to be very costly for you. Therefore, you are strongly recommended to do a thorough background check and comparison-shopping before you sign up with one.

Check Their Legitimacy

First of all, you must find out if the non-profit payday debt consolidation agency in question is duly licensed to offer their services in your state. Besides that, it is also important to note that all non-profit organizations are legally required to obtain a 501(c)(3) certificate. So, you must also check if the agency you are reviewing has this ‘non-profit’ certificate. A company that does not have this certificate and still claims to be working for no profit is an unscrupulous one, which you must avoid at all cost.

Check Their Past Records With The BBB

A reputable non-profit payday debt consolidation agency must also be a registered member of the Better Business Bureau. The BBB monitors their business operations and maintain records. Checking these records will help you determine whether the organization in question is following the business standards thoroughly or not. A background check done this way will also let you know if there have been consumer complaints against them.

Compliance With The New Debt Consolidation Laws

Since October 2010, several new debt consolidation laws have been in place in the United States of America. Therefore, it is also important for you to make sure that the non-profit payday debt consolidation agency you are reviewing is complying with all those laws thoroughly. Some important points of the new laws are as follows –

- Debt consolidation companies must not charge their fee in advance. They must first fulfill the promises they have made before charging any commission.
- There must be a written contract, where all the terms and conditions of the program must be explained in an easy-to-understand language.
- The agreement must disclose the actual cost of program and the mode of payment. There must not be any hidden expenses involved. Obviously, since it is a non-profit organization, you must expect them to charge you a much lower fee as compared to the fee charged by for-profit companies. So, be very careful while you are reviewing the cost of their debt relief programs.

Whenever you make a payment to a lender, they report it to the credit bureaus. If your lenders are reporting the payments as “paid as per a debt consolidation plan’, it will damage your credit. Therefore, you must also ask the non-profit payday debt consolidation agency to disclose in the written contract that how they are going to protect your credit.

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