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

CREDIT & DEBT - PAYING OFF DEBT
National Debt Relief and Freedom Debt Relief offer similar services but differ in state coverage and may quote you different fees.
Updated April 11, 2024
Fact checked
National Debt Relief vs. Freedom Debt Relief

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We recommend National Debt Relief1 because it has wider state coverage and higher customer service ratings than Freedom Debt Relief2. That said, both companies still excel at helping 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. We recommend getting quotes from both companies for the exact fee you'd be charged.

Let's dive into our National Debt Relief versus Freedom Debt Relief comparison to help you decide the better option for your situation.

In this article

Key takeaways

  • National Debt Relief and Freedom Debt Relief are two of the most popular debt settlement companies. Both companies can 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.

Compare National Debt Relief vs. Freedom Debt Relief

National Debt Relief and Freedom Debt Relief are both established and accredited debt settlement services. They work on a similar fee structure, and both have the same minimum debt balance to use their services. However, each company has something different to offer consumers.

National Debt Relief Freedom Debt Relief
Minimum debt $7,500 $7,500
Types of debt
  • Credit card debt
  • Payday loans
  • Store credit cards
  • Unsecured debt (including medical debt and personal loans)
  • Private student loans
  • Credit card debt
  • Payday loans
  • Store credit cards
  • Unsecured debt (including medical bills and personal loans)
  • Private student loans
Program length 24-48 months 24-48 months3
Fees 15%-25% of the amount of your total enrolled debt 15%-25% of the amount of your total enrolled debt
Availability 42 states Approximately 38 states
Accreditation AFCC, IAPDA AFCC, IAPDA
Best for... Clients looking for top-notch customer service Clients with hefty debt balances looking for affordable debt relief
Visit National Debt ReliefVisit Freedom Debt Relief

Our verdict

National Debt Relief and Freedom Debt Relief share significant similarities in their services, fees, program length, and more. That said, we like National Debt Relief a bit more than Freedom Debt Relief since it serves more states and has slightly better customer service ratings. We recommend that you choose the company that gives you a lower fee quote as long as it operates in your state.

How does National Debt Relief work?

Pros
  • Available in 42 states
  • Doesn’t require payment until your debt is settled
  • Has high customer service ratings with a clean legal record
Cons
  • Depending on your situation, fees could be as high as 25% of debt enrolled

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. But you won't owe anything until your debt has been successfully settled.

National Debt Relief offers:

  • A certified specialist will determine your eligibility by reviewing your financial information during a free consultation.
  • The National Debt Relief team will reach out to creditors and negotiate a reduction in the total balance you have to pay to satisfy your debt obligations.
  • National Debt Relief will try to protect you from creditor phone calls while you participate in their program.
  • You make monthly payments into an FDIC-insured savings account to save up a lump sum amount to pay your creditors.
  • At the end of 24 to 48 months: your creditors will receive a single lump sum payment, your debt should be resolved, and National Debt Relief will receive their fee from you.

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.

Visit National Debt Relief...

...Or learn more in our National Debt Relief review.

How does Freedom Debt Relief work?

Pros
  • Available in 38 states
  • Doesn’t require payment until your debt is settled
  • Has been in business since 2002
Cons
  • Depending on your situation, fees could be as high as 25% of debt enrolled
  • Was previously sued by the Consumer Financial Protection Bureau (CFPB)

Freedom Debt Relief can help you settle your debt for a fee between 15% and 25% of the amount of debt it helps you with. But you don't pay this fee until your debt has been successfully settled.

Freedom Debt Relief works on a similar business model to National Debt Relief.

Here is how the debt relief process works when you work with Freedom:

  • A Certified Debt Consultant will evaluate your debt situation during a free consultation.
  • After enrolling in the debt relief program, the company's debt experts will negotiate with creditors on your behalf.
  • You'll deposit money monthly into an FDIC-insured bank account that you control.
  • Once you've deposited enough money into the savings account, Freedom Debt Relief will help you make a lump sum payment to your creditors for a negotiated amount that's less than what your debt is worth.
  • The company's debt consultants will work with creditors to ensure that this payment settles your full debt balance.
  • When your debt is successfully settled, they'll also collect their fee from you.

Like National Debt Relief, Freedom Debt relief helps negotiate unsecured debts but cannot help with any loans that have collateral, such as auto loans or mortgages. However, they may be able to help with certain business debt, and they can handle private student loan debt.

Visit Freedom Debt Relief...

...Or learn more in our Freedom Debt Relief review.

What both debt relief companies excel at

National Debt Relief and Freedom Debt Relief both excel at delivering on their promises:

  • Both companies have great customer service ratings with the Better Business Bureau (BBB).
  • Both companies are accredited by the American Fair Credit Council (AFCC) and the International Association of Professional Debt Arbitrators (IAPDA).
  • Both companies don't charge any upfront fees until they've delivered for you and successfully settled your debt.

Warning
The Federal Trade Commission (FTC) made it illegal for debt settlement companies to charge upfront fees in 2010. If you ever come across a company that asks for payment before determining your eligibility for the program, it's probably a red flag.

5 important differences between National Debt Relief and Freedom Debt Relief

Although both companies have a lot in common, there are important differences between National Debt Relief and Freedom Debt Relief.

1. Fees

When determining how to pay off debt, you should be aware of the differences in the fees you'll pay for the two debt relief programs offered by Freedom Debt Relief and National Debt Relief. Both National Debt Relief and Freedom Debt Relief report that their fees range between 15% and 25% of the total debt enrolled.

Depending on your situation, the quote you receive from each company for debt relief services may differ. So which company will be better for you could vary, and you might want to inquire with both companies to get the best possible rate.

Winner: Tie since their fees share the same range, but you should get quotes from both companies since one may offer a lower fee than the other.

2. Customer service ratings

National Debt Relief is a Better Business Bureau (BBB) accredited business with an A+ rating. Its average customer satisfaction rating is 4.73 out of 5.

Freedom Debt Relief is also a BBB-accredited business with an A+ rating. Its average customer satisfaction rating is 4.56 out of 5 (both as of Mar. 26, 2024).

The difference in customer ratings suggests that overall many customers have had a positive experience with Freedom Debt Relief, but when issues arise, they tend to be more serious and challenging to resolve.

Winner: National Debt Relief since it has higher customer service ratings.

3. Legal record 

National Debt Relief didn't face legal actions from the Consumer Financial Protection Bureau (CFPB) or similar governmental bodies as of Mar. 26, 2024.

However, the CFPB sued Freedom Debt Relief for allegedly misleading customers about fees and services and not properly disclosing their rights to consumers concerning funds they'd deposited. The company agreed to pay $20 million to settle with the CFPB in 2019.

If reducing the risk of problems is a top goal, National Debt Relief may be a better bet. Of course, most Freedom Debt Relief customers did have a good experience, which justifies the company's overall higher consumer rating.

Winner: National Debt Relief for its clean legal record.

4. States where service is available

National Debt Relief is available in 42, while Freedom Debt Relief is available in 38 states.

The states where the companies do business also differ. For example, Freedom Debt Relief operates in Connecticut, while National Debt Relief does not. The state where you live may dictate which of these services you use based on whether it is available in your area.

Winner: National Debt Relief since it's available in more states.

5. Length of time in business

National Debt Relief started in 2009, while Freedom Debt Relief started in 2002 and has been incorporated since 2004. If you want to work with a company that was one of the pioneers of the debt settlement industry and has been in business for the longest time, Freedom Debt Relief could be your preferred choice.

Winner: Freedom Debt Relief since it has been in business for seven years longer.

Which debt relief service should you choose?

If price is your top priority, then you might want to 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

Can you trust Freedom Debt Relief?

Freedom Debt Relief is accredited by the American Fair Credit Council as well as by the International Association of Professional Debt Arbitrators. It has been in business since 2002 and is accredited by the Better Business Bureau. It also has a 4.56 rating out of 5 from customer reviews left with the BBB. It is a legitimate company and not a scam.

It has, however, been sued by the Consumer Financial Protection Bureau for misleading customers about fees and business practices. The company settled its lawsuit, and now clearly indicates it does not charge upfront fees. Just be careful to read the fine print and understand what you are agreeing to when you sign up for their debt settlement program.

Is National Debt Relief legit?

National Debt Relief is accredited by the American Fair Credit Council as well as by the International Association of Professional Debt Arbitrators. It has been in business since 2009 and is accredited by the Better Business Bureau. It also has a 4.73 out of 5 rating with the BBB based on customer reviews. It is a legitimate company.

What is the difference between debt consolidation and debt relief?

Debt consolidation involves taking a loan to pay off existing debts, potentially lowering monthly payments and interest rates without damaging credit. Debt settlement, however, negotiates with creditors to pay less than owed, which could impact your credit score, affect taxes, and incur higher fees.


Does debt relief affect your credit?

Some types of debt relief could have an adverse impact on your credit. If you settle debt, you generally could see your credit score fall. With debt settlement, creditors agree to accept less than the total amount you owe. 

They will usually report that debt as settled on your credit report, which could adversely affect your score and your ability to borrow in the future. Other types of debt relief, such as debt consolidation, generally will not have the same negative impact.

National Debt Relief vs. Freedom Debt Relief: bottom line

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 plenty of 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. 

Final comparison

National Debt Relief has slightly higher customer ratings than Freedom Debt Relief and is available in a few more states.

Visit National Debt Relief | Read our National Debt Relief review  

Freedom Debt Relief has been established for a few years longer and operates in different states from National Debt Relief. 

Visit Freedom Debt Relief | Read our Freedom Debt Relief review

Freedom Debt Relief Benefits

  • Recommended Minimum debt: $15,000
  • Has resolved over $17 billion in debt
  • Affordable program with one low monthly deposit
  • No upfront costs or hidden fees
  • May resolve unsecured debt in as little as 24-48 months3

Author Details

Christy Rakoczy Christy Rakoczy has a Juris Doctorate from UCLA Law School with a focus in Business Law, and a Certificate in Business Marketing with an English Degree from The University of Rochester. As a full-time personal finance writer, she writes about all things money-related but her special areas of focus are credit cards, personal loans, student loans, mortgages, smart debt payoff strategies, and retirement and Social Security. Her work has been featured by USA Today, MSN Money, CNN Money and more, and you can learn more at her LinkedIn profile.

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