Are the fees for consolidation and settlement the same?

If you consolidate your debts through balance transfer, the balance transfer fees differ between 3% to 5%. Whereas, in case of debt settlement, the fees differ from company to company. But, make sure to pay the fees only when your accounts are settled.

In the case of a debt consolidation loan, the Origination fees can be anywhere from 1% to 5% of your total loan amount. If you choose balance transfer, as Phil said above, the initial balance transfer fee is between 3-5%. Don't also forget about late fees ($15 to $35,) and cancellation fees(up to $400 or $500).

On the other hand, different companies charge you fees on debt settlement according to their company's policy. Normally, there are 2 different methods.

1. Fees based on the amount of debt that you enroll
2. Fees based on the amount that you save

Hope that helps.

The fees aren't same. The only similarity is that you don't have to pay an upfront fee in both the cases. In case of debt settlement, pay fees only when the company has negotiated or settled an account. I would suggest you to settle debts yourself. Why should you pay money to a settlement or a consolidation company?

It is always better to discuss and know about the fees to decide which company will suit you the best. You should also check reviews and not only decide based on the fees you need to pay.

As the others have mentioned, the fees for debt consolidation and debt settlement aren't the same. There's also a number of other differences, too, which you might want to read up on.

Here's a quick TL;DR:

1. Debt settlement can help you negotiate down your debts, but you're often required to skip payments etc to build leverage with your creditor. Which can be super risky.


2. It can take 2-3 years for the debt settlement process to finalize, which is 2-3 years of late fees and other penalties.


3. The amount of debt that ends up being forgiven is usually considered income for tax purposes, so keep this in mind.

Have you ever considered Debt Assumption as opposed to Debt Consolidation or Debt Settlement? I know with Debt Assumption you actually end up paying a lot less than with either Consolidation or Settlement. You also aren't liable for any tax burden. I know of several people who have used it Assumption instead of the others and it helped them tremendously. One in particular saved $108,000 and was debt free in 3 years instead of the 11 years it was originally going to take her.

Have you ever considered Debt Assumption as opposed to Debt Consolidation or Debt Settlement?