How much can you save by using a debt settlement loan in order to reduce your debts?
Can you do better? Absolutely, but your results will depend upon how well you (or the debt settlement company representing you) handle the negotiations. And if you do hire a debt settlement/negotiation company or attorney, you should keep in mind that the typical fee that they charge is around 15% of you total debt. Having to pay this fee will, of course, reduce the amount that you actual save.
You are probably familiar with the concept of a debt consolidation loan, but may not be as familiar with the concept of a loan to settle your debts. Here are the differences...Debt Consolidation Loans
People looking for a debt solution will often turn first to a debt consolidation loan thinking that this is the best way to get out of debt. For some reason (likely due to lack of information) most people perceive these types of debt loans as their best option, when in most cases they are not. Here's a breakdown of how consolidation loans work.
A loan to settle your debts is a bit of a different animal than the consolidation loans we discussed above. Here's how they work.
As you can see, the main difference between these two types of debt loans is the amount that must be borrowed to pay off your existing debts. With a settlement loan you must first negotiate with your creditors to accept a discount on the amount owed. However, this is not the case with regular consolidation loans which only transfer your debt from one creditor to another without actually reducing the amount owed.