Criticisms

First off, people are too quick to throw one loan after another. This has been due to the fact that up until recently lending has been promoted via a big marketing blitz. The more consumers spend, the more they need to borrow, which has been big business for lenders in terms of interest and ultimately late fees. Someone looking to consolidate their debt should be very clear that it is the best solution for them, not the lender, before jumping in.

People also need to commit the purpose of a credit consolidation loan which is to ultimately get rid of the debt once you can breathe. Many don’t. It is quite common for people to consolidate under one loan, and then max out their old credit cards again. Why? They never committed to changing their financial lifestyle. They just change lenders and who they paid interest to. As soon as they get some wiggle room, they went right out and bought more stuff on credit. And the cycle repeats.

Second, a lot of help agencies out there use the “non-profit” label but make their living on the fees charged for acting as liaisons or consolidation lenders. Again, most of them are in fact businesses focused on making profit on consumer debt management. A quick check for true non-profit status is to ask to see their tax non-profit status paperwork required by the IRS.

Others use religion to cover their activities. Many financial businesses make significant inroads into churches and religious communities because many trust their church leader’s advice. When the church leader advises using a particular help agency, followers flock with blind trust. Again, the first question to ask is who is this religious help agency helping? You or themselves?

Conclusion