National Debt Relief vs. Freedom Debt Relief [2024]: The Pros and Cons to Each (2024)

I recommend National Debt Relief² because it has wider state coverage and higher customer service ratings than Freedom Debt Relief.³ That said, both companies could help you resolve unmanageable debt by negotiating an agreement with your creditors, so you might prefer Freedom Debt Relief if its fee is lower.

Both companies charge a fee between 15% and 25% of the debt you enroll, depending on your situation. I’d suggest getting quotes from both companies (and possibly others) for the exact fee you'd be charged.

Key takeaways

• National Debt Relief and Freedom Debt Relief are two of the most popular debt settlement companies. Their purpose is to help you negotiate your debt with creditors.
• Both companies have similar fee structures, ranging between 15% and 25% of the total enrolled debt amount. Your actual fee will depend on your situation.
• National Debt Relief has slightly higher customer ratings than Freedom Debt Relief on the Better Business Bureau (BBB).
• Freedom Debt Relief was previously sued by the Consumer Financial Protection Bureau (CFPB) for allegedly misleading customers on fees, while National Debt Relief has not faced such legal issues.
• National Debt Relief is available in more states than Freedom Debt Relief.

National Debt Relief vs. Freedom Debt Relief: how they’re similar

National Debt Relief and Freedom Debt Relief are both established and accredited debt settlement services. This means that you hire them to handle negotiations with your creditors to possibly reduce your balance or otherwise change the terms of your debts. Take a look at the many ways in which National Debt Relief and Freedom Debt Relief are identical:

• Minimum debt of $7,500
• Types of debt included: credit card debt, payday loans, store credit cards, unsecured debt like medical debt and personal loans, private student loans
• Length of program: aims for 24-48 months
• Fees: 15%-25% of total enrolled debt
• No payment due until and unless you reach a settlement agreement
• Accreditation: AFCC, IAPDA
• A+ ratings from the Better Business Bureau

National Debt Relief vs. Freedom Debt Relief: key differences

There truly aren’t many things that differentiate these two debt settlement providers. But here are a few differences that might help swing your decision in one direction.

Availability

These programs aren’t available in every state, although it’s definitely a majority of the states where you can access the programs. National Debt Relief is available in 47 states, while Freedom Debt Relief is available in 42 states. So you’ve got a little bit better odds of working with National Debt Relief, but you can check the list of states for each to verify your options.

Customer service ratings

I hesitate to even include this as a differentiating factor because the margin is so small, but let’s look at customer ratings for both companies anyway.

On the BBB site:

• National Debt Relief: 4.74/5 stars (based on 4,544 reviews)
• Freedom Debt Relief: 4.47/5 stars (based on 1,916 reviews)

Trustpilot:

• National Debt Relief: 4.7/5 stars (based on 40,377 reviews)
• Freedom Debt Relief: 4.6/5 stars (based on 43,833 reviews)

As you can see, National Debt Relief has a slight edge over Freedom Debt Relief in terms of customer ratings. If you need something quantitative to help you decide, that factor just might work. (But honestly, I’d say they’re basically equal, if I were trying to make this choice.)

Legal record

Check out the legal history of both National Debt Relief vs. Freedom Debt Relief, and you’ll see one glaring difference. Freedom Debt Relief has faced legal action from the Consumer Financial Protection Bureau (CFPB), while National Debt Relief has no such lawsuits tainting its credibility.

The CFPB sued Freedom Debt Relief for inappropriate conduct including misleading customers and charging them without providing debt relief. In 2019, Freedom Debt Relief agreed to pay $20 million in restitution to affected consumers as well as a $5 million civil penalty.

If you prefer to avoid working with a company with a mark like that on its record, stick with National Debt Relief. That said, Freedom Debt Relief now makes it clear on its website that you don’t pay them anything until debt is negotiated, settlement approved, and first payment made to a creditor. I wouldn’t necessarily rule this company out solely based on the lawsuit.

Fees for debt settlement

Yes, I’ve included the fees in both the “similarities” and “differences” sections, and here’s why: Both Freedom Debt Relief and National Debt Relief say they charge between 15% and 25% of your enrolled debt. So that leaves room for one company to offer you a better deal than the other.

Since the initial evaluation is free, you can get information from both companies and ask what their fees would be. This can help you make your decision easier, since so many other factors are equal.

Example of fee differences:

Plus, I can’t promise this would work, but it may even be an option to get a quote from one debt settlement firm and use it as leverage with another one. They might be willing to lower your fee if they know you’re shopping around.

How debt settlement works

While this is a comparison article, debt settlement in general works the same way whether you choose to hire National Debt Relief or Freedom Debt Relief. Let’s talk briefly about the process.

You might pursue debt settlement if you have especially large debt balances (both companies require at least $7,500 in debt). If you can’t see a way to get beyond making minimum payments, you’ve calculated that it could be five or ten years or longer before you’ll be debt-free, debt settlement may be a wise choice.

However, there are other options for handling stressful amounts of debt. You might negotiate your credit card debt by contacting your credit card issuers directly, for one. Or try debt consolidation or creating a debt management plan. Debt settlement is another way to find debt relief, but it’s not a foolproof method.

National Debt Relief is focused on settling your debt and charges a fee between 15% and 25% of the amount of debt you enroll in. And guess what? The same is true for Freedom Debt Relief. And with both of these companies, you won't owe anything until your debt has been successfully settled.

Debt settlement process with both National Debt Relief and Freedom Debt Relief:

• Free consultation with a consultant or specialist.
• You deposit funds into a dedicated FDIC-insured account each month.
• The company contacts each of your creditors to try and negotiate on your behalf.
• Once the balance in your dedicated account is large enough, the debt settlement company will make the final payments to your creditors, typically in an agreed-upon lump sum amount that’s less than the original balance.
• Once creditors have been paid, you also pay the debt settlement fee (typically 15-25% of the enrolled debt).

In general, National Debt Relief works well at negotiating unsecured debt, but, like most debt relief services, it can't help with secured loans such as auto loans or mortgages. However, they may be able to help with some kinds of business debt, and they can handle private student loan debt.

Freedom Debt Relief is on the same business model, therefore it can’t help you with secured debts.

A word of caution about debt settlement

Although debt settlement is a valid option for dealing with debt when you feel like you’re drowning in it, proceed with caution. Your credit score will likely drop if you enroll in a debt settlement program, partly because you’ll need to stop making payments to creditors while the company negotiates with them.

Consider multiple options like finding an extra side hustle to help pay off debt or consolidating to simplify payments before signing up with a debt settlement company. Also, remember that you’ll pay up to 25% of the enrolled debt in fees, so you want to negotiate a deal that saves you more than that amount.

Which debt relief service should you choose?

If price is your top priority, then I’d say you should get a free quote from both companies and opt for the service with the lower fee.

For example, if you have $25,000 in debt that a company helps you settle, the difference in the fees you pay could be substantial. If you are charged at a rate of 18%, your minimum fee would be as much as $4,500, while a 15% fee would come in at a more affordable $3,750.

If you don't want to take a chance on a potential customer service problem, you may opt for National Debt Relief instead, as National Debt Relief doesn't have the history of being sued by the CFPB that Freedom Debt Relief does.

FAQ

Bottom line

I want to be clear that working with a debt relief company is not right for everyone. It could damage your credit, and it can take some time until you've saved enough money to make a lump sum payment to settle your debt.

There are also several alternative debt solutions to consider in your pursuit of becoming debt-free, such as debt consolidation, a debt management plan, or credit counseling. Still, settling debt could be preferable to bankruptcy and sometimes makes the most sense.

If you want to settle debt, you can negotiate with creditors on your own to avoid the fees that debt settlement companies charge. However, if you're not comfortable working through the debt settlement process yourself, both National Debt Relief and Freedom Debt Relief could help you deal with your debt issues for a fee.