Do Non-Profit Credit Counselors Loan Money?
In some cases, consumers can borrow money directly from a non-profit credit counselor to pay off outstanding debts. This type of loan is called a “debt consolidation” loan, where the company pays the creditors up front and collects a reasonable monthly fee from the borrower until the debt is repaid. These loans are not always easy to get, as they require a decent credit score. In other instances, the debt is still consolidated and reduced to one affordable monthly payment, but the money from the borrower is placed into a trust fund and used to gradually pay off all the creditors. This method still simplifies the debt repayment process, stops fees associated with late payments, boosts credit scores and reduces interest rates significantly.
