debt consolidation

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00:00Debt can kind of feel like an unwanted guest who refuses to leave.

00:04If you're juggling student loans, credit cards, personal loans, or medical bills,

00:08the combination of different due dates, interest rates, and late fees can be exhausting.

00:12You'll likely hear about debt consolidation and debt relief,

00:15two strategies for making debt more manageable but with distinct methods.

00:19Countless companies promise the best fix, but this video focuses on three major options,

00:24national debt relief, freedom debt relief, and accredited debt relief.

00:27To explain how each works, what they offer, and how to decide if one might suit you.

00:32Now, before diving into the specifics of these three companies,

00:35it's helpful to spell out the difference between debt consolidation and debt relief.

00:39Debt consolidation is when you combine multiple debts, such as credit card balances, into one new loan.

00:45Instead of paying separate bills with different due dates and interest rates,

00:48you gather them all under a single roof.

00:51If you secure a good interest rate on this new loan, you could save money over time.

00:55Plus, making just one monthly payment can be far less stressful than juggling five or six.

01:00That said, lenders tend to look for decent credit scores and a stable income,

01:04since they need to be sure you'll reliably repay the new loan.

01:08For those who qualify, a consolidation loan can be a convenient way to manage debt

01:12while keeping credit damage to a minimum.

01:15Debt relief, sometimes called debt settlement, works differently.

01:18Rather than giving you a new loan, a debt relief company negotiates directly with your creditors,

01:23such as credit card issuers, to reduce the total you owe.

01:26If you're carrying $10,000, let's say, in credit card debt,

01:30a company might try to bring that balance down to $6,000 or $7,000.

01:33You typically deposit money monthly into a dedicated account.

01:37Once there's enough saved, the company contacts your creditor

01:40to propose a lump sum payment at a lower amount.

01:43Because many programs have you pause payments during negotiations,

01:46your credit score may temporarily drop, and creditors might call or send collection notices.

01:51Still, for people who are overwhelmed by large balances,

01:54reducing the principal can make a world of difference,

01:57even if it comes with short-term credit consequences.

02:00Whether you choose consolidation or settlement often depends on factors

02:04like how healthy your credit score is, how much debt you have in total,

02:06and how quickly you need relief.

02:08All right, so one of the most visible companies in the debt settlement space

02:12is National Debt Relief.

02:14Despite its name, it doesn't usually offer debt consolidation loans,

02:17focusing instead on negotiating the total amounts owed on unsecured debts

02:21like credit cards, personal loans, and medical bills.

02:25Debts that are backed by collaterals, such as mortgages or car loans,

02:28generally don't qualify.

02:30Many customers are drawn to National Debt Relief because of its track record.

02:33It has helped thousands of people reduce significant debt over periods

02:36that range from 24 to 48 months.

02:39The company operates on a performance-based fee model,

02:42so you typically pay a fee only after it successfully settles at least one of your debts.

02:47That fee is usually a percentage of the enrolled debt,

02:50and the exact figure can depend on your state and the amount you owe.

02:53People who opt for National Debt Relief

02:55generally stop making payments to creditors once they start the program,

02:59which can lead to missed payment notations on their credit reports.

03:02While that can be unsettling, especially if you've worked hard to keep up with bills,

03:06the prospect of a substantial cut in the total owed can outweigh that downside.

03:10As you save money in a separate account each month,

03:13the company will attempt to reach favorable settlement agreements.

03:16If you already have yourself in a situation where you're behind on payments

03:19or dealing with rising interest,

03:21this approach can be a structured way to handle the problem.

03:23Though it's not a quick fix,

03:24many who complete the program come out in a stronger place financially.

03:28And then Freedom Debt Relief,

03:29which is part of the larger Freedom Financial Network,

03:32is another major name in the debt settlement world.

03:34Like National Debt Relief,

03:36it aims to reduce the amount you owe on unsecured debts through negotiation.

03:39After an initial consultation to assess whether you're a good fit,

03:44the company sets up a plan in which you deposit money each month into a special account.

03:48When there's enough saved,

03:49Freedom Debt Relief's negotiators contact one of your creditors with a settlement offer.

03:53Their fees are also success-based,

03:55meaning you generally only pay once a settlement is reached and accepted.

03:59The percentage you'll owe in fees can vary depending on your circumstances and the laws in your state,

04:04but it often falls somewhere between 15% and 25% of your enrolled debt.

04:09Moreover, Freedom Debt Relief has earned attention for its transparent step-by-step approach.

04:13Clients often appreciate receiving regular updates,

04:16so they know exactly when a creditor has been contacted or when a settlement is closed.

04:20As with other settlement companies,

04:22pausing payments can hurt your credit score,

04:24and you may also field calls or letters from creditors during this saving period.

04:28But for individuals with overwhelming balances,

04:31the opportunity to settle for less can be a turning point that helps them breathe a bit easier.

04:35Once a settlement has been made and paid off,

04:38that particular debt is considered resolved,

04:40allowing you to shift your focus to the rest of your debts

04:42until each one of them has been settled or paid.

04:45And last but not least is Accredited Debt Relief.

04:47They offer a slightly different twist,

04:50like National Debt Relief and Freedom.

04:52It provides settlement services for people with unsecured debts.

04:55However, it also partners with third-party lenders

04:57that can extend debt consolidation loans,

05:00which might be the more suitable option

05:01if your credit and income are sufficient for approval.

05:05This dual model offers flexibility for people

05:07who aren't sure whether a new loan or a settlement program is the better path.

05:12During a free consultation,

05:13the company takes a thorough look at your overall financial situation,

05:17how much debt you carry,

05:18what kind of unsecured balances you have,

05:20your monthly income,

05:21and how you've been managing your accounts.

05:23From there,

05:24Accredited Debt Relief might recommend

05:26either a settlement program or a consolidation loan,

05:29depending on which fits you better.

05:30If you choose settlement,

05:31you'll typically spend 12 to 48 months

05:33depositing money into a special account

05:35until there's enough to negotiate a lump sum payoff.

05:39As with similar firms,

05:40fees only come into play once a settlement is successfully reached,

05:43so the company's interests are aligned

05:45with your goal of reducing what you owe.

05:47All right, so we've established

05:49that all three companies share a few core attributes.

05:51First, they all focus on unsecured debts,

05:54such as credit cards, personal loans, and medical bills.

05:56Second, they charge performance-based fees,

05:59so you typically don't pay anything

06:00until at least one debt is successfully negotiated

06:03and accepted by your creditor.

06:04And third, most programs involve halting payments to creditors

06:07when you save money in a special account,

06:09which can negatively impact your credit score

06:11and result in collection attempts.

06:13The big difference is that Accredited Debt Relief

06:16offers the option of a consolidation loan

06:18through partnerships if you qualify,

06:20while the other two concentrate on settlements.

06:22If your credit is in relatively good shape,

06:24that consolidation pathway might be appealing

06:26because it can help you avoid the credit hits

06:28and stress of negotiating.

06:30On the other hand,

06:31if you're already behind on payments

06:32or have a lower credit score,

06:34a settlement-based approach might save you more money overall

06:37by aiming to reduce the principal.

06:39Fee structures for each company

06:40can range from around 15% to 25%

06:43of the total enrolled debt

06:44influenced by where you live

06:46and the complexity of your situation.

06:48Timelines also vary from about a year

06:50to as many as four,

06:51depending on how quickly you can build up savings

06:53for lump-sum settlements

06:55or how soon you can fully repay a consolidation loan.

06:58Now, deciding whether to pursue consolidation

07:00or settlement and which company to trust is a big step.

07:03The first thing to ask yourself

07:05is whether most of your debts are unsecured.

07:08Mortgages and auto loans

07:09won't be covered by settlement programs.

07:11So if your main financial worry is a mortgage,

07:13you may need to look elsewhere.

07:15Next, think about your credit score.

07:17If you still have decent credit and a steady paycheck,

07:19it might be easier and more cost-effective

07:21to consolidate rather than risk extra damage

07:24from missed payments.

07:25If your credit has already taken some hits

07:27and you have high balances that feel unmanageable,

07:30settlements might be the path

07:31that brings more substantial relief,

07:33even if it takes a toll

07:34on your short-term credit standing.

07:36You'll also need to be realistic about your budget.

07:38Both consolidation and settlement

07:40demand monthly contributions,

07:42whether you're making a single loan payment to a bank

07:44or stocking away money in a special account for negotiations.

07:48Consider your overall cashflow

07:50and whether you can handle that commitment

07:51without risking new financial problems.

07:53Talking with a financial advisor

07:55or even a trusted friend who understands money management

07:58can help you see any blind spots.

08:00And sometimes a second opinion

08:01and a clear sense of your long-term goals

08:03can make the choice between consolidation

08:05and settlement much easier.

08:07And that just about wraps up today's video.

08:09Ladies and gentlemen,

08:10if you have any further questions,

08:11don't hesitate to leave them in the comments down below.

08:14I'll get to you when I can.

08:15Also, if you enjoy the video,

08:17consider liking and subscribing to the channel.

08:19At any rate though,

08:20thank you all so much for watching the video

08:21and until next time,

08:23make sure to take care.

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