What does it cost for Debt Consolidation, Debt Settlement, and Debt Relief?

Lump Sum Payoff

The cost of debt settlement varies from person to person. Part of your debt consolidation plan may involve a lump sum payoff.  A lump sum payoff is when you pay off a portion of your debt with a lump sum payment. The monies for this lump sum payment may come from sources such as a second mortgage, or from savings. Either way, the interest rate you pay on these sources of money is less than the interest you are paying to your creditor. Therefore, you save money in the long run by taking advantage of less expensive sources of money (i.e. money with lower interest rates), leading to faster debt relief.

Monthly Payments

A lump sum payoff will also reduce your monthly debt payments. By paying off a chunk of your debt, your remaining balance will be lower, and therefore your monthly payment will be lower. If you are unable to payoff a lump sum, debt settlement will still reduce your monthly payment. Your debt settlement institution will work with you to determine a reasonable monthly payment based on your financial situation. They will then work to reduce your monthly payment to that amount by either negotiating a lower minimum payment with your creditors, or by reducing your total debt obligation.

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