Non Profit Credit Counseling Companies

– Are They A Blessing?

By: - Credit - March 24, 2011
non profit credit counseling companies

Non profit credit counseling organizations are the agencies that negotiate with creditors and make an appropriate Debt Management Program. These companies work without any financial profits of their own. According to this Debt Management Plan the creditors are advised to reduce the rate of interest on which they have provided credit to a consumer. In normal conditions when a consumer is defaulter and regularly pays his debts off timely, the rate of interest may be up to 30%. However if a consumer is incapable of paying the same amount he can join the DMP which is offered by any credit counseling agency. As soon as the consumer joins Debt Management Program of any agency, the deal may be negotiated and it is quite possible that after the agreement of both parties the interest rate is reduced to 5% to 10%. Also, in many cases these agencies bargain with the creditors to make consumers pay the amount without any interest at all.

The other major task that is performed by these companies is that they educate the consumers with various methods about how to reduce the increasing amount of debts on them. During these counseling sessions these credit counseling agencies offer their Debt Management Programs which a consumer can choose and can be relieved from the burden of his debts.

In earlier days there were agencies which did not work as non profit credit counseling organizations. On the contrary, they used to charge a decent amount of fees in order to make things easier for both creditors and the consumers. As the time passed by, these agencies switched from profit counseling to non profit credit counseling companies. However these agencies were funded by the government or by the public which find these companies quite reliable and useful. On the other hand these companies were not liked by the creditors in the early ages. Gradually when creditors realized that these companies were actually helping them to dig out the money from dead deals they find these agencies quite helpful and useful for them too.

In the late 80s or early 90s there were approximately more than 1000 of these credit counseling agencies in United States of America. However this amount decreased as the time passed by and today not more than 300 of these counseling agencies are active in the area. Because these agencies are helpful for both creditors and the consumers none of them have objection on the existence of these companies anymore. On the contrary whenever a consumer or a creditor needs any kind of assistance he contacts these organizations and requests for their help.

To conclude it can be said that these agencies keep their doors open for everybody and every time. This means that they do the needful whenever they find that the party requesting for support is in real victim of the culprit party. All in all these credit counseling agencies are there to provide the best possible assistance as far as financial aspects of any individual or organization is concerned.