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Debt settlement features the same advantages of debt consolidation, in addition to offering you more savings and quicker debt relief. Debt settlement helps you regain financial freedom by allowing you to fund debt at a reduced payoff instead of the entire amount with debt consolidation loans.
The main benefits of debt consolidation entail dealing with only one creditor instead of multiple creditors. With only one creditor, the collection calls stop and you handle less stress.
This advantage of dealing with only one creditor also occurs through debt settlement. When you enroll in debt settlement, the company contacts your creditors on your behalf to help resolve debt problems. Debt settlement companies act as a middle ground between you and your creditors, allowing all parties to decide on a repayment plan.
Another advantage of debt consolidation involves easier repayment terms and a lower interest rate. However, debt settlement exceeds this advantage by reducing your actual debt amount and eliminating interest charges.
Once you enroll in debt settlement, you begin setting aside money each month for a settlement fund. When you accrue enough funds, the debt settlement company negotiates with your creditors for a settlement payoff. The credit agrees to waive 40 to 60 percent of the principal debt and accepts the remaining sum as full repayment.
The advantages of debt settlement far exceed debt consolidation. The goal of any debt-relief method should be to save you money and quickly pay off debts. Debt settlement allows you to eliminate debt fast by paying only 50 cents on the dollar for each debt balance.
By: Brad Mcdonald
Article Source: www.ArticlesBase.com
Brad is a financial writer for www.creditsolutions.com and specializes in personal debt.
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