Best Debt Relief Companies 2024

Debt Relief: When Consolidation Isn’t Enough

Debt can be frightening, overwhelming, and altogether debilitating, and with more than $3.8 trillion hovering over the American public, you are not the only one facing these fears. If you're staring down the barrel of several thousands of dollars worth of accrued debt and uncertain of what to do about it, this article can help give you some peace of mind and hopefully point you in the right direction if you don’t know where to turn.
A personal loan is a great idea if you can get approved for one, but if your credit isn’t great, this might be tough. Assuming you’ve ruled out this and other more obvious options, debt relief might be your best bet. It has its pluses and minuses, but when you are drowning in debt, relief may be the most logical course of action for you. Here’s what you need to know and how to get it done fast.

Debt Relief: What You Need to Know

Debt relief, which is carried out in the form of debt settlement,  isn’t a typical loan. With a standard personal loan, you’ll find a lender willing to loan you the money, pay off your debt, and then pay back the lender over time. This is not the case with debt relief. In fact, the biggest benefit of debt relief lies in the fact that you will probably end up paying less than the total of what you currently owe right now. Here’s how it works:

• You might be asked to cease payments toward your debt (if you haven't already). That means, no more paying your credit card bills each month, no more student loan repayments, etc.
• When your creditors see that you’ve stopped paying and aren’t going to be paying in the future (because you cannot afford to, not simply because you were negligent in your payments), your relief service can work to reach an agreement for a lower amount than was originally owed.
• This works because creditors would rather get some money than no money by holding out for the larger original sum.
• Your debt relief agent will arrange a debt relief program in which it will allocate your single monthly payments, or a lump sum that you’ve amassed to the creditors.

If you can’t afford to pay your current debt but don’t want to file for bankruptcy, debt relief or settlement could be the solution. But there are important drawbacks to debt relief options that you need to understand before you commit, including:

Expect a mark on your credit score

Debt settlement doesn’t look good on your credit report. While it’s not as bad as bankruptcy, settlement is still a black mark that could last for 7 years.

Get ready for some heat

You may have to stop making payments to your creditors in order for the pressure to build up before debt settlement can become an option. When you stop payments, your creditors will send your account to a collection agency. Depending on which one they use, this can be aggressive. From frequent phone calls to rude emails, you’ll need to grow some thick skin to handle it.

Beware of taxes

A final thought to consider is the tax implications of debt settlement: depending on the circumstances (location, amount, financial status, etc.), you may need to pay taxes on the amount of debt you’ve settled. For example, if you’ve settled for $10,000 less than your overall debt, you may need to pay taxes on that $10,000 as income.

How to Choose the Best Debt Relief Program

If you’ve decided that debt settlement is the way to go, make sure you’re dealing with the best in the business. Since some companies will just want to take your money and run, only sign up for someone with the right credentials, including:

Services offered

When looking for a debt settlement service, first ask what types of services are being offered. Will they actually guarantee debt settlement? What type of settlements will they broker? How much debt is required to work with them? Will they work with student loan debt, secured debt, or just credit card debts? What fees will you incur? Learn all you'll need to know about a company before you even begin negotiations.

Reputation

Reputation is of the utmost importance when it comes to debt relief, due to the already compromised situation you are in currently. Dig deep in order to find out as much as you can about the company. This will include reading online reviews, talking to customer service reps, going through customer feedback, searching for a BBB profile, etc. Also look for accreditation; any reputable debt relief company should be accredited by the AFCC or the IAPDA.

Terms

Finally, look at what terms you are getting yourself into. Read through the fine print to ensure you aren’t being mislead. A company with a good reputation will generally state their terms in full disclosures and complete transparency, not hiding anything from its clients.

In addition, avoid companies that make outlandish promises (erase all your debt, pay pennies on the dollar, etc.) or tell you they’ve got an exciting government program to offer you (they don’t).

How to Apply for Debt Settlement

With the help of modern technology, applying for a debt settlement program has never been easier. You can go online to any of the reputable debt relief companies listed above and sign up on the spot. You’ll be asked a few basic questions such as your overall current debt, whether or not you’re behind in payments, and some personal details like a phone number and email address to contact you with. Since you’ll be asked these basic questions, it’s a good idea to do some preliminary prep work, like:

• Organizing all of your debt, so you can have a ballpark estimate of your entire debt amount
• Be ready to provide more detailed information about the type of debt (credit card, student loans, auto loans, etc.)
• Take a personal accounting of your monthly expenses, so you can see what a realistic monthly payment plan would look like for you

Then, just apply:

1. Go online and fill out an application form.
2. You can get pre-approval instantly sometimes. Other services may take a few minutes to approve your application.
3. Wait for a rep to contact you.
4. Discuss your options and make a repayment/debt settlement plan that works for you.

Debt Relief Terms and Rates

Most debt settlement services charge you either a percentage of the overall debt or a percentage of the settlement amount, ranging in the 15% - 25% ballpark. Be wary of any service that forces you to pay an upfront fee for its help. That's not even legal.
Debt relief isn’t the best first choice, but if you are struggling with debt and can’t make the monthly payments, it might be a good option for you. It often beats declaring bankruptcy. Contact a competent debt settlement company, and discuss your options today.

What is an APR?

APR is an acronym for annual percentage rate. It combines the charges, fees, and payments to tell you the grand total of what your loan will cost you per year. The lower the APR, the less you are going to pay in the long run.
The APR calculation on personal loans will vary depending on your lender, but it will typically be lower than what you would receive from a payday or short-term loan – usually starting at 10% and capping at 35.99%. It is not ideal to owe any money, but if you require a loan, then a personal loan could certainly be a viable option.
APR rates mentioned include associated fees.
Full repayment for the loans displayed range between 61 days to 180 months.
Representative example: assuming a loan of $10,000 over 60 months at a fixed rate of 3.1% per annum and fees of $60.00. This would result in a representative rate of 3.3% APR, with monthly repayments of $180.80, for a total amount paid of $10,848.00.

* LightStream Terms and Conditions:

*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Trust Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank. Truist Bank is an Equal Housing Lender. © 2022 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

*  Marcus By Goldman Sachs® Offer Terms and Conditions:

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose, our evaluation of your creditworthiness, your credit history, if we have recently declined your loan application and the number of loans you already have with us. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. You may be required to have some of your funds sent directly to creditors to pay down certain types of unsecured debt. Receive a 0.25% APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details.

* LendingClub Terms and Conditions:

A representative example of loan payment terms is as follows: you receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46. Loan amounts range from $1,000 to $40,000 and loan term lengths are 36 months or 60 months. Some amounts and term lengths may be unavailable in certain states. APR ranges from 8.05% to 35.89% and is determined at the time of application. Origination fee ranges from 3% to 6% of the loan amount. Lowest APR is available to borrowers with excellent credit. Advertised rates are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Loans are subject to credit approval and sufficient investor commitment before they can be funded or issued. Certain information that we subsequently obtain as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan from us. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.

* Freedom Terms and Conditions:  

The financial solutions for which you will be evaluated are offered by service providers with which we are affiliated and/or compensated by who participates on our website. Terms and conditions apply to each, and not all are available in every state.

The financial solutions for which you will be evaluated are offered by service providers with which we are affiliated and/or compensated by who participates on our website. Terms and conditions apply to each, and not all are available in every state.

Achieve.com, a d/b/a of Bills.com, LLC (NMLS ID #138464) operates as a marketing lead generator for affiliates and non-affiliates, and as a broker for loans and debt resolution services offered by its affiliates. We also offer certain mobile applications that allow consumers to view and analyze their finances. We may take applications for our affiliates, but we do not make credit decisions, originate loans, process consumer loans or bill payments, or provide any other financial services. We do not collect any fees or other compensation from consumers.

Personal loans are available through Achieve Personal Loans (NMLS ID #227977), originated by Cross River Bank, a New Jersey State Chartered Commercial Bank or Pathward N.A., Equal Housing Lenders and may not be available in all states. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, credit usage and history. Loans are not available to residents of all states. Minimum loan amounts vary due to state specific legal restrictions. Loan amounts generally range from $5,000 to $50,000 (including the origination fee) and are offered based on underwriting conditions and loan purpose. APRs range from 7.99 to 29.99% and include applicable origination fees. Repayment periods range from 24 to 60 months.

For example: A four-year $20,000 loan with an APR of 18.34% would have an estimated monthly payment of $561.60 and total cost of $26,956.80. To qualify for a 7.99% APR loan, a borrower will need excellent credit, a loan amount of $12,000.00 or less, and a term of 24 months.

Loan origination fees vary from 1.99%to 6.99%, most loans have a fee of 4.99%. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to pay off qualifying existing debt directly; or showing proof of sufficient retirement savings, could help you also qualify for a lower rate. Average interest savings for personal loans range from 0% - 6% based on closed loans that qualified for one or more of our rate discounts in July 2022.

†Times noted are estimates and can vary for a loan request from Achieve Personal Loans (NMLS #227977). Same day approvals assume that a fully completed application with all required supporting documentation is provided early enough on a day that our offices are open. Achieve Personal Loans consultants are available Monday–Friday 6AM to 8PM MST and Saturday–Sunday 7AM to 4PM MST.

*  Reach Financial Terms and Conditions:

All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply. All loans advertised are unsecured personal loans issued by either Metabank® National association, member FDIC, or FinWise Bank, a Utah chartered commercial bank, member FDIC, as creditor, on the Liberty Lending platform. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, and the loan term you select. Fixed Annual Percentage Rates (APR) range from 5.99% to 35.99%. You could receive a loan of $10,000 with an interest rate of 8.93%, an origination fee of $200, for an APR of 9.80%, which would result in total payment of $12,435 with 60 monthly payments of $207.20. Your actual rate may differ and depends on your credit history, loan amount, and term. Total approved loan amount reflects origination fee, which ranges from 0% to 5%. *Within 24 hours of your loan approval, loan proceeds will be available to pay the creditors named on your Truth-In-Lending Disclosure.

‡ Upgrade Terms and Conditions:

Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners/.

* Universal Credit Terms and Conditions:

Personal loans made through Universal Credit feature Annual Percentage Rates (APRs) of 11.69%-35.99%. All personal loans have a 5.25% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 36 to 60 months. For example, if you receive a $10,000 loan with a 36-month term and a 28.47% APR (which includes a 22.99% yearly interest rate and a 7% one-time origination fee), you would receive $9,300 in your account and would have a required monthly payment of $387.05. Over the life of the loan, your payments would total $13,933.62. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Universal Credit's bank partners. Information on Universal Credit's bank partners can be found at https://www.universal-credit.com/bank-partners/.