subject: A Side-by-side Comparison Of Debt Consolidation And Debt Settlement [print this page] There are two popular debt solutions today, debt consolidation and debt settlement. Both are effective debt relief options if used correctly. However depending on your particular financial situation, you need to learn the pros and cons of each debt option in order to pick the right one that is going to work best for you and your needs.
There are advantages and disadvantages associated with both forms of debt control. Let's examine both options further to identify the differences, the advantages, and the disadvantages of each debt solution.
It is quite easy to work with a good debt consolidation agency. With the help of a debt consolidation loan, you can pay off your creditors with one consolidated payment. Sometimes, a debt consolidation loan could help lower your interest payment as well.
Debt settlement process takes longer time comparing to debt consolidation practices. You may spend a few years before reaching a settlement with your creditors even with the help from a debt settlement company. The fees involve with debt settlement programs are higher than other debt options, but you will be able reduce the amount of your total debt up to 50%. It is recommended for you to enlist help from a legal professional to get settlement underway.
Some creditors may or may not be willing to work with a debt settlement representative or agent too and you will have to work out what bills you can get under the settlement program as well as the debts belonging to creditors that are less flexible. You may find that creditors like MasterCard and Visa are far less willing to settle your debts.
In the beginning of debt settlement, it is overwhelming to work with the debt settlement company and creditors and negotiate the debts and fees involved.
Debt consolidation practices are far more private. There is no publicity or advertising involved when you opt for consolidation. Debt consolidation allows creditors to collect more payments over a period of time so that they can recoup more of their losses. Even celebrities have made use of consolidation plans in order to pay back past debts and to get back on track again financially.
As you can see, both debt consolidation and debt settlement options have their own pros and cons. You should fully understands the differences between these two debt solutions and pick the one that is going to work best for you.
It is important for you to make the correct decision and pick a debt relief solution that works better for you. Once you pay off all your debts, you will get the peace of mind that you have always been looking for.
by: Wayne Wilson
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