A debt reduction program is provided by companies specializing in handling debt situations for customers.
Any program suggested by the company would depend upon the debt condition of the customer.
Let us try to find out the debt reduction programs available in the market today.
1.
Debt settlement 2.
Debt Consolidation A good program would depend on the condition of debt of the customer.
It would depend on the fee charged by the program.
It would depend on the relief provided to the customer by the program.
Let us try to see which program is recommended in which condition.
Debt Settlement is suggested to a customer who is fighting to pay off one single debt.
The original debt bill has been aggregated with late fine charges and other charges which forces the customer to pay just the minimum and roll over the rest.
Under such circumstances the customer takes the services of a debt settlement company and asks them to negotiate with the debtors to lower the debt bill by waiving off all the extra charges and negotiate further on the interest rate of payment.
Debt Consolidation is suggested to customers with multiple creditors.
For consolidation the customer need not apply for a new loan at a lower rate of interest.
The customer asks the consolidation company to negotiate with the creditors to waive off the extra interest charges and negotiate the interest rates charged to them.
The payments are consolidated into one single payment and the consolidation company takes care of the payment on a month to month basis.
Depending on the customer's condition, the debt management company suggests what program the customer needs to follow.
Debt companies help the customer to get rid of debt and collection calls which constantly harasses the customer at all times.