Looking Into Nonprofit Debt Consolidation Loans To Start Eliminating Your Debt

August 12, 2009 by  
Filed under Debt

One of the hardest parts of trying to clear your debts is keeping track of all the little as well as large debts that have to be paid each month. Many people are opting for nonprofit debt consolidation loans to keep all of their debts in one place making them easier to keep track of. Using this type of loan means you have one payment per month and more often than not the interest rate will be overall lower then what you were paying for the individual debts.

The most obvious place to get your debt consolidation loan would be from your own bank. If you have been a member of your bank for a long time and have had a reasonable track record, you are probably more likely to be granted a loan. It is also easier for the bank to keep track of you and your financial circumstances.

Another place that you can apply for a loan, is with a Credit Union. This type of establishment is probably a bit more “user friendly” with the structure of a co-operative consisting of all of the members being equal owners of the business. These unions use different methods and laws and will be more likely to give you a wider choice with debt counselling along the way. In general, they usually offer more competitive interest rates than banks.

The members of the credit union, both save money and borrow money. The borrowers will pay interest which then goes towards the savers, who earn the interest, keeping all of the money in one place.

However, Credit Unions are not usually open to all and sundry. With regulation by the Credit Union National Association, (CUNA), there is a group of people that may join the union such as, a certain area, workplace or education establishment. This group of members is known as the “field of association” and you must belong to that field in order to borrow or save with that particular union.

Once you have found a credit union that you may be a part of, you can find out if they offer debt consolidation loan. If so, you can get the necessary details and advice.

Once you have the figures including the interest rates and the payment instalments, you can compare with your existing debt solutions. You may even receive free debt counselling from the union to help you make an informed choice as to what would be the most financially suitable option. However, the bottom line is – will you be saving and/or will the monthly payments be realistic and maintainable?

It is worth reading through all the terms and conditions of the nonprofit debt consolidation loans and make sure you are happy with all the factors. You will probably find that in most cases. the credit unions will offer a lower interest rate with a less “clinical” setting. The emphasis is not on profiting from your hardship but helping you get out of it.