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Consumer Savings Varies Between Consolidating Debt and Debt SettlementFor consumers looking to relieve their debts, they must evaluate whether debt consolidation or debt settlement will save more money. Minimizing credit card debt with a debt consolidation loan involves consumers combining all high-interest balances into one loan with a lower interest rate. Eliminating debt with our service, debt settlement, entails working with different creditors so they accept a partial payment as full repayment. Prior to pursuing debt consolidation, consumers need to decide how they will control their current finances. Consumers need to adjust their spending habits and stop using credit cards. Neither debt consolidation nor our service will help consumers who continue to make credit purchases and accumulate high-interest debts. Debt Consolidation by the NumbersA debt consolidation loan pays off existing debt, eliminates multiple creditors and converts multiple debts into one loan with one lender. The savings advantage of debt consolidation occurs through lower interest rates. For example, a married couple may owe $25,000 in debt on five credit cards at 15 percent interest. They must borrow a $25,000 loan at 7 percent interest with a five-year term to pay off the debts. With the loan, they pay $4,700 in total interest throughout the life. If they paid the debt off in five years without the loan, they pay nearly $10,700 in total interest and $100 more per month. Debt Relief Numbers with Our ServiceIn contrast, with our service plan, the couple would save and set aside money for a settlement fund. Once they saved enough money, we work with the creditors to reduce the $25,000. If creditors agree to waive a large percentage of the debt and accept the remaining sum as full repayment, the couple's debt now equals $12,500. After paying us, the couple pays about $14,000 to eliminate the $25,000 debt. The couple saves nearly $15,000 with our service than debt consolidation. Our service is the only debt-reduction method that reduces the total debt while debt consolidation only reduces interest costs. Debt consolidation loans can provide a cheap method to reorganize debt and, eventually, eliminate it, but consumers can maximize saving with our program. You can settle your debts today. Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. He has written about various debt relief topics. Credit Solutions provides an alternative to consolidating your debt.
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