Gold Award Winner
National Debt Relief
888-651-4344
Click to Call

ProsAverage reduction rates, after fees, are higher with National Debt Relief than other companies' rates.
9.55
/ 10
9.45
/ 10
9.25
/ 10
9.13
/ 10
8.48
/ 10
8.33
/ 10
7.95
/ 10
7.80
/ 10
6.45
/ 10
4.65
/ 10
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Programs Offered

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Debt Settlement
Debt Management
Debt Consolidation
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Cost & Fees

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Transparency
95%
100%
90%
90%
85%
90%
80%
85%
85%
80%
Program Time Frame
24-48 Months
36-48 Months
24-60 Months
24-48 Months
24-48 Months
24-48 Months
24-48 Months
12-42 Months
1-42 Months
6-48 Months
Average Reduction After Fees
30%
37%
30%
25%
30%
29%
N/A
33%
42%
35%
Fee for Debt Reduced
18-25%
14-20%
15-25%
18-25%
15-22%
20-24%
20%
20%
35%
25%
Average Fees for $10,000 of Debt
$1,800- 2,500
$1,400- 2,000
$1,500- 2,500
$1,800- 2,500
$1,500- 2,200
$2,000- 2,400
$2,000
$2,000
$2,030
$2,500
Debt Calculated
Enrolled
Enrolled
Enrolled
Enrolled
Enrolled
Enrolled
Enrolled
Enrolled
Settled
Settled
No Monthly Fee
$10.75
$50.00

Eligibility & Application

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Minimum Required Debt
$7,500
None
$7,500
$7,500
$10,000
$10,000
$7,500
$5,000
$10,000
$1,000
Personal Debts
Business Debts
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Customer Experience

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Customer Service
85%
90%
80%
80%
80%
75%
80%
90%
80%
75%
Resources
90%
95%
90%
90%
80%
85%
90%
80%
85%
80%
Personal Advisor
Online Management
Mobile Management
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Company Accreditations

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IAPDA
USOBA
AFCC

Best Debt Consolidation

Do Loans From Debt Consolidation Services Help?

After 100 hours of researching and calling debt consolidation companies, our top choice is National Debt Relief, which is one of the most transparent companies we spoke to. It offers top-notch customer service and its costs and fees are well in line with industry standards. Debt consolidation is worth looking at if you have at least $7,500 of debt. On $10,000 of debt you can expect to pay anywhere between $1,400 to $2,500 in fees. You’ll only pay fees when debt is settled successfully.

New Era Debt Solutions is another standout company. It has flexible programs that don’t have any minimum debt requirements. New Era assigns a single person to your case, so it is a good choice if you value personalized service. They update you on the progress of your program and are available to answer any questions you have. Fees range from 14 percent to 20 percent and are among the lowest we saw. Like all reputable debt consolidation companies, it doesn’t charge upfront fees.

Freedom Debt Relief is another industry leader, and it offers some of the highest quality customer service. In addition, the company has an easy-to-use dashboard that tracks your consolidation program and the progress of its negotiations with your creditors. The dashboard also gives you expedited access to customer service, along with scripts and tools to deal with collections calls. Freedom’s programs range from 24 to 60 months and have an average fee reduction of around 30 percent, making it one of the more successful debt consolidation services. Accredited Debt Relief is an affiliate and offers the same programs.

Pacific Debt has great tools to help you manage and monitor the status of your debt consolidation. You can use its mobile app to see the progress of your settlement and how close you are to completing your program. Pacific only operates in 32 states, but its customer service is highly responsive by email, text and phone. One thing to remember is Pacific is based in California, so if you live on the East Coast, you have to factor in the time difference while working with them.

Oak View Law Group is one of the few debt consolidation companies to operate in all 50 states. Be aware that it uses a model many see as a way to skirt regulations against charging fees before the completion of the program. Oak View charges a monthly $50 consultation fee but deducts that amount from the fees it charges when it settles your debt. Still, this fee is in addition to the amount you put aside for future settlements, so you need to budget for that additional fee.

Debt Management: What Are Your Options?

When you start pursuing debt management options, you may get mixed messages from people in the debt relief industry. Because there is no general industry consensus as to what the best ways to manage debt are, we have narrowed down your options. Many of these options work hand in hand with or as part of a larger debt reduction program, but in general, these are your choices:

Debt Settlement: Settlement is the process of negotiating with your creditors in hopes of reducing the total amount of debt you owe them. While you can undertake this process on your own, many people choose to hire a professional debt settlement company or lawyer to negotiate on their behalf.

When you begin this process, you set aside funds each month into a separate, insured account. While you're building up your funds, the company or lawyer you've selected negotiates with your creditors to try to reduce the total amount of debt you owe. When a settlement is reached, the funds you have been setting aside go toward paying your creditors and negotiation fees. These programs take around two to four years to complete and negatively influence your credit.

Debt Consolidation: Consolidation is the process of combining all your debts into a single, lower payment by taking out a loan to pay off your creditors. Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan. The goal of consolidation is to have a lower payment at a lower interest rate than you currently have. It can be confusing because debt consolidation is also used to refer to debt settlement programs as well.

Debt Management Program: These programs often work hand in hand with credit counseling. During this program, you receive financial counseling and meet with a financial advisor. Additionally, the debt management company contacts your creditors and attempts to negotiate lower interest rates on your behalf. Lower interest rates allow you to more quickly pay off your debts. These debt relief programs don’t have a negative impact on your credit but may limit your credit options for their durations.

Bankruptcy: This should be a last resort as it negatively affects your credit for many years. With bankruptcy, you officially declare that you cannot pay your debts. To pursue bankruptcy, you must qualify and complete the entire process, including pre-filing and post-filing counseling.

Debt Consolidation Loans: What Are the Risks?

While a debt consolidation is less risky than other options, like bankruptcy, it still carries a considerable amount of risk. When you take out a consolidation loan, you are required to put forth collateral. Most often, the required collateral is a second mortgage or a home equity line of credit. This is incredibly risky because if you cannot meet your payments, your home is on the line. Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.

In addition to putting your home at risk, many consumers end up prolonging their debt. While having one low rate and one payment is an attractive option, many people end up in similar or worse financial situations when attempting credit card debt consolidation. According to Cambridge Credit Corp., a nonprofit credit-counseling agency, 70 percent of Americans who take out consolidation loans end up with the same or more debt after two years.

Types of Debt That Can Be Helped by a Debt Consolidation Service

Types of debt vary, and this influences what you can consolidate. The first thing to determine is if your debt is secured or unsecured. Secured debt is attached to collateral. For example, car loans and mortgages are secured debts. Unsecured debts are loans or lines of credit without collateral attached to them and include credit cards and medical bills.

Certain unsecured debts, like student loans or payday loans, may not be eligible for consolidation. Before you enroll with a company, explore your options with a financial consultant so you know exactly which debts you can and cannot consolidate.

Debt Consolidation Loans for People With Bad Credit

Many companies advertise low interest rates for direct loan consolidation, but these rates are typically reserved for those with exceptional credit ratings. If you've had trouble with your finances in the past, you most likely will not qualify for these rates; consolidation loans for bad credit, often come with high interest rates attached. However, if you've met with a financial advisor and have the discipline to stick with a longer payment period, then debt consolidation might be worth the sacrifices.

Best Debt Consolidation Companies: What to Look For

When choosing a company to consolidate your debt, it is important to find one that’s reliable and compliant with FTC regulations. Don’t work with a company that doesn’t disclose all the legally required information before encouraging you to enroll.

Accreditations are another key indicator of whether a company adheres to ethical standards. The accreditations listed below are through private agencies, not the government. However, these entities are recognized as authorities in the industry and have missions to promote ethical debt management practices.

The American Fair Credit Council (AFCC), formerly known as the TASC, advocates for consumers. To be AFCC accredited, a company must be fully compliant with FTC regulations and undergo an annual renewal process.

The International Association of Professional Debt Arbitrators (IAPDA) offers certifications and exercises for debt specialists. The employees at companies that are IAPDA certified have been professionally trained in debt management best practices and upholding ethical standards.

The United States Organizations for Bankruptcy Alternatives (USOBA) has rigorous standards that go beyond FTC regulations, and debt consolidation companies must adhere to them to be certified.

Lastly, look closely at the supplemental resources a company offers. While any company can provide negotiation or consolidation services, the best ones provide solutions for managing your finances and staying out of debt. Any company that’s looking for repeat customers should be avoided.

What We Evaluated, What We Found

Debt consolidation programs require you to submit personal identifying information and meet a minimum debt limit before you can enroll. Because of these requirements and debt consolidation’s negative impact on your credit score, our reviewers were unable to fully test the multi-step debt consolidation process. While we didn’t test the process, we evaluated other important aspects of the programs themselves, such as customer service and industry credibility.

Your financial and personal needs determine which company is best for you, but the following factors are important to consider as you decide which debt consolidation program to pursue, no matter your situation. Since these programs can take years to complete, it is vital to consider all the information up front.

Transparency

How forthcoming a company is with information is a huge factor when choosing a debt consolidation company. Before you sign anything, make sure you understand the company’s history. Due to the New Rule, there are things a company legally must disclose to you before you enroll in its program. These include educated estimates of the potential length of your program, the cost of your program, your rights as a consumer, and the fact that you are still responsible for your debts and may receive collection calls.

Companies legally cannot charge upfront fees for services and must provide an upfront estimate of how long your program will take. Also, they should never put pressure on you to disclose personal information, such as your bank information, before you enroll in their program.

Finally, consolidation companies cannot promise to stop collection calls. Collection agencies are within their legal rights to contact you. While your debt consolidation company may attempt to reduce the number of calls you receive, they might not stop, especially if you stop making your payments to your creditors as part of the program.

For our tests, we examined how well a company adhered to these standards. We contacted each one multiple times over the phone and through email. We asked detailed questions about the program requirements, including the length and cost of the program. We also asked about upfront fees and what companies do stop collection calls. Lastly, we made note of any companies that pushed us for personal information during the consultation. Companies should provide a consultation and all relevant information before pushing you to enroll.

In these tests, New Era Debt Solutions was the most transparent. Representitives were forthright in answering our qusetions, and the information was consistent. In addition, the company website has a detailed Truth and Transparency section dedicated to explaining the processes of its program and the FTC regulations. Many companies advertise that they never charge upfront fees but fail to acknowledge that they legally cannot do so. New Era clearly explains the FTC rules about upfront fees and does not try to take credit for lack of advanced charges.

In addition to restrictions on advance fees, the FTC requires that you are named the owner of any dedicated account used for debt settlement plans and that the funds in that account can be withdrawn at any time. The FTC also requires settlement companies to make disclosures about the potential drawbacks of joining a settlement program. To learn more about these regulations, consult the FTC’s website.

Customer Service & Resources

Most debt consolidation programs provide a personal advisor who manages your account for the duration of your program. This personalized attention and familiarity with your accounts is especially important because of the amount of time a consolidation program takes.

In our tests, we evaluated how thoroughly representatives explained the debt consolidation program and other available debt relief options. While debt consolidation can help you manage your debt, it is not the only solution, and sometimes it is not the right fit for you. The best debt consolidation companies encourage you to examine all your options instead of forcing you into one.

Pacific Debt Incorporated scored especially well in customer service. Its support agents were polite and not pushy. Additionally, when they did not have the answers on hand, they sought them out and promptly followed up with us.

Due to the length of debt consolidation programs and the amount of money and discipline required on your part, it is vital to learn as much as you can about a company before beginning its program. Seek out companies that provide transparent information, adhere to FTC regulations and offer consistent, personal support.

What Is Credit Counseling & How Can It Help?

Depending on the amount or type of debt you have, you might be referred to a credit counselor. Most of the debt consolidation companies we reviewed refer you to a credit counseling firm if you have around $7,500 or less in unsecured debt such as credit cards and personal loans.

Credit counseling usually entails two things. The first is a call with a certified counselor. During this call, you go over your expenses, income and savings, and they help you create a budget. They can also point you to resources for getting credit reports. Credit counselors can also recommend ways to manage your debt – for example through bankruptcy, debt settlement or debt management plans managed by the credit counseling agency.

Under a debt management plan, you make payments to the credit counseling agency, which then disperses the payments to your creditors. Credit counseling agencies can usually get some concessions, such as reduced interest rates or an elimination of late fees. Keep in mind that a debt management plan is ideal for credit card debt and doesn’t often work with other types of debt.

There are some costs associated with a debt management plan: a setup fee and a monthly fee. Monthly fees can range between $15 and $30, and setup fees usually fall between $20 and $40. This is different from a debt settlement plan’s fee structure, where you pay between 15- and 25-percent of the amount settled.

Debt management plans tend to take longer than debt consolidation, lasting up to five years. There’s some disagreement about the extent to which a debt management plan affects your credit. According to Credit.org, the plan itself doesn’t detract from your credit score, but it is marked on your report, which prevents you from getting approved for new credit. As part of the plan, you close your accounts, which also affects your credit score in the short term.

If credit counseling sounds like something that could help you, check out the National Foundation for Credit Counseling’s list of accredited organizations.

Can I Get a Debt Consolidation Loan With Bad Credit?

Some lenders do offer debt consolidations for borrowers with bad credit. Debt consolidation loans do have more generous credit requirements than other types of loans, but if you have poor credit you’re still likely to get a higher rate – as high as 36 percent. High rates make a typical debt consolidation loan a bad option if you have a credit score below 650.

There may be other options, too. Some online personal loans providers, such as Avant and One Main Financial are geared towards borrowers with bad credit. One Main doesn’t have a minimum credit score for it's loans and Avant offers loans to borrowers with a minimum score of 580.

You can also try to get a loan through a local credit union. Credit unions tend to have less strict requirements, though with a low score you’re still likely to get a high rate.

If you own your home, you can use a home equity loan to consolidate your debt. Your home is a strong piece of collateral, so lenders will be more likely to lend to you even if you have a low score. Rates on home equity loans also tend to be lower than other types of debt consolidation, so if you own a home, this should be the first option you explore.

How to Avoid Debt This Holiday Season

The holidays are a time for big spending. The National Retail Federation estimates the average consumer will spend over $1,000 this holiday season, split between gifts, food and decorations. With that much extra spending, it's likely some of those purchases will be put on credit cards. A Magnify Money survey of spending in 2017 showed that customers who incurred debt over the holidays ended up with about $1,000. The survey also shows that 64 percent of people didn’t intend on taking out that debt.

There are some ways you can limit or avoid getting in debt during the holidays, and the first is to make a budget. Set a spending limit and stick to it. Make a list of all the people you plan on buying gifts for and set spending limits on those gifts. If you have kids, set a limit on how many presents you’ll buy for them. Remember to include additional costs, like gift wrap, decorations and travel, in your budget.

As part of your budget, try to set money aside before the holidays. If you can build up a holiday fund during the rest of the year, you won’t have to resort to putting gifts on your credit cards.

Experiences and homemade gifts are another option. Homemade gifts are appreciated and add a personal touch to the holidays. They’re also a good way to show your talents. They don’t even need to be extravagant. Experiences like a home cooked meal or a day trip can be a welcome alternative.

Is Bankruptcy a Good Option?

Bankruptcy is a scary word, and it’s often seen as a last resort. But if your debt becomes unsustainable or you suffer an injury or job loss that leaves you unable to keep up, it may become your best option.

The two most common types of bankruptcy are Chapter 7 and Chapter 13. Under Chapter 7, all your unsecured debt, including credit cards and personal loans, is wiped out. However, you may be required to relinquish some of your assets. Chapter 13 involves creating a payment plan with your creditors. This usually takes between three and five years, and you aren’t required to give up anything. Chapter 7 can take between six and nine months. To be eligible for Chapter 7, you need to meet certain income requirements.

Bankruptcy is a legal process, and you need to fill out forms and file them in court. You don’t necessarily need an attorney to file bankruptcy, but if you can afford one, it can make it easier to file your case. You’re also required to attend mandatory credit counseling before you file and then again once the bankruptcy is complete.

No matter which type of bankruptcy you use, it has a dramatic effect on your credit, dropping your score anywhere from 130 to 240 points. Chapter 7 bankruptcy stays on your credit report for 10 years and Chapter 13 stays on for seven years. You can start building up your score after you complete your bankruptcy, but your credit options will be limited.