What Are Debt Consolidators?

Debt Consolidators: Defined

Debt consolidators, interchangeably referred to as debt consolidation companies, assist consumers with debt consolidation loans.  In this practice, the debt consolidator will be contracted by the consumer to assist with the debt consolidation process.  Payments to debt consolidators are typically based on a percentage of the total amount of debt being consolidated.  Additionally some debt consolidators charge their customers by taking a cut of their monthly payments, or also by simply charging a one-time upfront fee for the completed debt consolidation loans.  Each debt consolidator has their own standards and practices, whether they are typical debt consolidators or non-profit debt consolidators.  However all end in the same place: acquiring a debt reduction for their clients by using a debt consolidation loan.

Non-Profit Debt Consolidators

Amongst the field of debt consolidators exist another breed of company: non-profit debt consolidators.  Non-profit debt consolidators, at least in theory, operate in the exact same fashion as regular for-profit debt consolidation companies.  They only differ in how their organization is run.  As a non-profit debt consolidator, to maintain their tax exempt status with the Feds, the company must not turn a profit while servicing its customers.  They can pay their own salaries, pay the rent, the electricity, and so on, but they cannot collect money for the purposes of enriching their company.  More often than not a non-profit debt consolidator will charge when assisting customers with debt consolidation loans.

Debt Consolidators: Worth The Money?

While there will always exist cases where a debt consolidator has left their customers dissatisfied with the their debt consolidation, or worse yet committed a costly error the customer now has to pay, more often than not they save consumers money.  A decent debt consolidator can usually achieve savings for their customers up to and beyond 30% over what the consumer can get by taking debt consolidation loans on their own.

Related posts:

1. What Are Credit Consolidators?
2. How Do Debt Consolidators Bring My Payments Down?
3. What Can Debt Consolidators Reduce Rates To?
4. How To Get A Debt Consolidation Non Profit?
5. Is There A Non Profit Credit Card Debt Consolidation Company?