It is significant to mention that debt consolidation lenders do not eliminate the original debt. Instead, they easily move a user's loans to a new lender or loan type. For true debt relief, or for those that do not qualify for loans, debt settlement may be preferable to, or in addition to, a consolidation loan.

Instead of the number of creditors, debt settlement seeks to reduce a consumer's obligations. Debt-relief organisations and credit counselling services are available to consumers. These organisations do not make loans, but rather attempt to negotiate a new borrower's existing debts with creditors.

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