Even though Debt Management Plans are often referred to as "debt consolidation," there is a difference. While debt management plans consolidate your monthly payments into one, easy payment, they are not debt consolidation loans.
A debt plan is a mutual agreement between you and a credit counseling agency. Simply put, you agree to repay your unsecured debts in full over time, without taking on any more debt. In return, most creditors will agree to significantly reduce your interest charges and waive any late fees (Typically benefits are granted after the first 3 consecutive payments).
Benfits of debt management plan
Save Time:-
A DMP can help get you out of debt more quickly than you could on your own (Assumes the consumer would only make minimum monthly payments).
Save Money:-
A DMP can drastically reduce the high rates of interest typically charged by most creditors. They often also eliminate late fees, so more of your money goes toward reducing your debt (Typcially benefits are granted after the first 3 consecutive payments.)
Gain Peace of Mind:-
Besides putting an end to harassing calls from collectors, the right provider can guide you through a difficult time and help you plan a brighter financial future.
Why debt management plan
A debt management plan :-
Can drastically reduce interest rates and eliminate late fees.
Potential to save up to 57% on your monthly payments.
One consolidated payment for your unsecured debts.
