When the balance has reached a sufficient level, NDR negotiates with your individual creditors in an attempt to get them to accept less than what is owed. Expect your credit score to drop 75-125 points as your bills go unpaid and accounts become delinquent.If a settlement is reached, the debt is paid from the escrow account. In Charge (nonprofit debt consolidation), Avant (debt consolidation loan) and National Debt Relief (debt settlement) each represent different segments of the debt consolidation industry.

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Debt consolidation programs make it easier to eliminate high-interest credit card debt by reducing the interest rate and lowering monthly payments to an affordable level.

The primary goal of debt consolidation programs is to help you eliminate debt and save a little money in the process.

FEES: A one-time setup fee that ranges from $50-$75. LENGTH OF TIME: 3-5 years with no penalty for early payment.

CREDIT SCORE IMPACT: Typically, credit scores will improve after six months of on-time payments.

Avant requires a minimum score of 580 with an annual gross income above $20,000. LENGTH OF TIME: 2-5 years with no penalty for early payment.

If approved, you receive a fixed-rate loan and use it to pay off your credit card balances. CREDIT SCORE IMPACT: Applying for a loan has no effect on your credit score, but missing payments will hurt your score.If you enroll in the program, you agree to have In Charge debit a monthly payment, which will then be distributed to your creditors in agreed upon amounts.In return, credit card companies agree to lower interest rates to around 8% (sometimes lower), which results in lower monthly payments.Debt consolidation works when the interest rate and monthly payment on your credit card debt is reduced by combining all your bills into a single payment.Another way to consolidate high-interest debt is to have an agency negotiate a settlement with the card companies for less than what is owed.We’ll explain the advantages and disadvantages of each to help you distinguish between the three types of debt consolidation programs, as well as how to get started.