[Case Study] How Early Graduation Loans Save Overhead for Debt Settlement Companies

For debt settlement companies, it’s important to have a loan solution like early graduation loans for consumers. “If you’re not in this business with a loan solution for your consumer, your competition does,” says Teresa Dodson, CEO & Founder of Greenbacks Consulting, Inc. “You can’t stick with the old way of doing things.”

As debt settlement companies look for loan solutions that are right for their business, it’s important to properly weigh any fees associated with the option. “FreshStart Lending offers both a flat fee and a percentage, so debt settlement companies can decide what works best for their business,” explains David Rueda, Executive Vice President at LendingUSA.

“For most debt settlement companies the [flat fee] is an easier way to manage it internally,” Teresa says. Additionally, a flat fee can be more beneficial as debt settlement companies scale their business. And while initially, some may wonder why they have to pay a fee for early graduation loans, Teresa explains that it’s important to look at the larger scope of the debt settlement business.


Overhead Costs

“Always be sure that you’re looking at the bigger picture,” explains Teresa. According to Greenbacks Consulting, if you were to continue to service a client for the remainder of the program, it may cost your business between $2,000 and $3,000 per client. As a result, getting a client out of the program in seven months instead of 36 months can actually save the business thousands of dollars. “There are so many costs associated with each consumer in your program,” says Teresa. “The faster you can move them along, the easier it will be to keep these costs down. Plus, the benefits to the consumer are undeniable.”

Scalability Increasing Cash Flow & Accelerating Fees Consumer Benefits

For debt settlement companies looking to increase growth, scaling operations can be a challenge. However, as Teresa explains, this approach can help you effectively scale your business. “For each consumer enrolled in your program, you have a head count associated with that. When I only have to support a client for seven months instead of thirty-six, my head count is much lower.” Using this type of solution allows you to keep your headcount lower as the business grows, allowing for easier scalability.

Increasing Cash Flow & Accelerating Fees

With FreshStart Lending, debt overhead settlement companies are paid upfront, in full when they utilize their client’s early graduation loans to settle debts. “As a result, you’re able to increase cash flow and accelerate fees,” Teresa says. This allows debt settlement companies to realize revenue faster. But even more important, the consumer settles their debt faster, gets into a loan they can afford, begins reestablishing their credit worthiness and are back on the road to financial recovery.

Consumer Benefits

In addition to the many benefits an early graduation loan poses for debt settlement companies, there are also excellent benefits to your clients. Put simply, clients can get their debt resolved in record time when they are able to take out a new loan at month seven. “Putting your clients into a loan this quickly allows them the opportunity to get back on their feet with their credit,” says Teresa. “As you look for better ways to serve consumers, considering their satisfaction level with your program is critical.”


All Freshstart loans are made by Cross River Bank, a New Jersey State Chartered Bank. Member FDIC. As of 11/5/20 loan amounts range from $1,000 to $35,000; no loans are offered in CO, CT, IA, KS, MD, MS, ND, NH, PR, SC, VI, VT, WA, WI, WV and WY and; an origination fee of up to 8% may be included in the principal loan amount that results in an APR up to 29.99%.

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