Free debt consolidation is a misnomer that does not really exist. These services may be provided at lower than normal charges, and the charges are minimal so as to be a non-issue. Here, they are called free grants.
Creditors pay these companies a part of the loan as commission generally, to maintain these services. Here is not then charged from the debtor. It is normally seen that the consolidation companies charge the debtor a flat fee for these services. At times they also charge a commission. These charges are generally based on factors such as, the credit rating of the debtor as well as the volume of debt, and the amount of loan that is being arranged.
The free debt consolidation does not involve such fees, except an insignificant flat fee from the debtor. By hiring such a free debt consolidation service, interest rates are further reduced, and are helpful for the debtor.
There are several non-profit organizations that help debtors by providing credit counseling. These organizations also help individuals to handle their debts. Grants are available from certain Federal Government agencies, and other organizations but they are generally meant to achieve certain goals. There is a plethora of web sites on the Internet that guarantee government grants for their customers. The Federal Trade Commission has warned against such advertisements. Government or organizations give grants, usually for the betterment of the community, society or people at large.
It is very difficult to get through the formalities to find out if you are eligible for such loans and grants. There is no government program that offers grants for personal debt repayment, or any program that provides money in the form of debt consolidation loans to an individual. It? S very difficult to find an organization that is interested in giving grants to pay off bills and credit card accounts.
It is important to be careful and wary about fraudulent companies, when choosing a free debt consolidation service. It is better to check and verify the credentials of such companies before approaching them.