Debt relief loans companies can make your debt more manageable through various solutions like debt renegotiation or replacing your original loan with one that has different terms, such as a lower interest rate or a longer repayment period. The goal is to help you get back on your feet more quickly than you would if you were trying to go it alone.

However, these services aren’t right for everyone. And they’re typically more expensive than working with a credit counselor or using an alternative such as debt consolidation loans or balance transfer credit cards. Plus, debt relief options can hurt your credit score.

Debt Relief Loans: Are They the Right Solution for You

For example, if you enroll in a debt settlement program, you’ll likely owe the company 15% to 25% of any debt it successfully settles for you (not including the forgiven amount). In addition, the National Foundation for Credit Counseling says debt settlement companies may also charge you a setup fee and monthly fees for a savings account they establish through a third-party bank.

While there are legitimate debt relief options, such as a reputable credit counseling agency or a nonprofit debt management plan, there’s also an increased risk of scams. If a debt relief company asks for an upfront payment, guarantees it can wipe out your debts for a fraction of what you owe, or promises to stop collection calls and lawsuits, those are red flags that indicate a possible scam. The best way to protect yourself is to evaluate what got you in debt, set better spending and saving habits and be firm about your budget.