Risks of debt consolidation are greater than most debtors are aware of

Debt Reduction Solutions Risks of Debt Consolidation

Difference between Debt Settlement Reduction and Debt Consolidation

We specifically want you to know the difference between debt settlement reduction and debt consolidation as a means of reducing your unsecured debt.

To be aware of the difference between the methods of debt settlement reduction and debt consolidation clearly, it is necessary for you to first understand the process of debt settlement reduction clearly.

Debt reduction services begin when we contact your creditor and request for a DEBT REDUCTION in the PRINCIPAL. We will only make this request once you have built up enough money to pay approximately 40% of the current balance. To build up your debt reduction account, you will make payments to us instead of the actual creditor. Please understand that with debt reduction services or debt settlement, we do not make monthly payments to the creditor. Instead, we make one lump sum payment from your debt reduction services account. Please note: This is your own private debt reduction services account yet we have made it so the creditor has NO way whatsoever to garnish this account.

When do you need debt settlement reduction? To begin, let us tell you that debt settlement reduction should be used as a last resort before bankruptcy. The lender had given you money in good faith and it is his moral right to get the money back. Unless you truly have a financial crunch, you should avoid debt settlement reduction.

Advice on Debt Consolidation

One thing every single person should know is that in any kind of debt consolidation, debt management, debt reduction, debt settlement, or arbitration for debt reduction will have a negative impact on your credit report. Unless your debt to income ratio is too high such that you can’t borrow anymore, you should avoid all types of debt reduction services. Instead try to borrow funds at a low interest rate and pay your current debt off with these funds. Just be sure to cancel your credit cards immediately or you may be tempted to use them again and may be forced to join a debt reduction services or debt settlement program.

Risks of Debt Consolidation

The risks of debt consolidation are greater than most debtors are aware of. Unlike debt settlement reduction, which actually helps you REDUCE your principal by an average of 63%, debt consolidation does not offer you any debt reduction in principal but helps you to pay your debt by lowering your interest rate to an average of 13%. Remember that you have to pay the debt consolidation company $29-$49 in monthly fees plus the average interest rate of 13%. Your true interest rate is closer to 18-20%. The reason debt consolidation gets you out of debt in 6-7 years is that your payment is actually higher than making the minimum payments to your creditors. Also, you are forced to stop spending on your credit cards and you won’t have any more late fees or over the limit fees.

If you are disciplined enough to cut up your credit cards, pay every bill on time, and can pay $20 more than the minimum payment then we NEVER recommend debt consolidation. Yet we realize that debt consolidation is a real option for people who are simply not disciplined to stop spending.

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Looking for more debt reduction information? Contact us at info@best-debt-reduction-solutions.com or call toll-free at 888-248-9891

We take our payment on a performance basis as a flat percentage of the amount we save you from your settlement.

Don’t pay us any settlement fees until AFTER a settlement has been paid!!!