Have you seen one of those advertisements for non profit organizations offering to help you get out of debt? They garner immediate trust, don't they? After all, everyone in the ad and on their website seems so pleased with their services, and they are, after all a non profit organization - therefore they must be totally altruistic, right? Well, many are, but don't just automatically assume that this is the case.

First of all, how does debt consolidation work? Well, when you have many outstanding debts - such as student loans, medical bills, and revolving lines of credit or credit cards - it can be helpful to combine all of those into one payment. This is what a debt consolidation company can help you to do.

What you, as the debtor, are most often required to do is take out a new loan at a lower interest rate to cover that payment. Other services sometimes offered by the consolidation organization often include brokering negotiations with credit card companies to get lower rates and a reduction in the total amount owed, or credit counseling. Because non profit debt consolidation firms get much of their operating capital through grants and donations, they can offer these services at little to no charge.

Sounds magical, doesn't it? Well, not entirely. There's no speedy cure for annihilating debt immediately and painlessly. Even debt consolidation has its downsides. For instance, even at lower rates and lower payments, it will still likely be years before the debt is entirely paid off. Secondly, the use of a consolidation service can sometimes have a negative impact on you credit rating, or FICO score. As with any decision in life, you need to weigh the pros and cons.