subject: Credit Card Debt Relief Options - Debt Settlement Vs Consolidation [print this page] Credit Card Debt Relief Options - Debt Settlement Vs Consolidation
There are two popular options when it comes to debt relief: debt settlement and debt consolidation. Although both are good, you need to make sure that the one you pick is the better choice for your finances. In this article we will discuss both of the methods, with their pros and cons.
Debt consolidation actually means getting another loan; the important thing about debt consolidation is getting a loan with low interest rates or at least lower than the ones you are paying at the moment. After you get that loan you pay any debt you have with the specific loan. Then, you are left to pay the rest of your debt as installments to the loan you took. Why is this method good? Because sometimes you can really have big interest rates and additional fees on certain loans that can keep you from paying them on time each month. Another benefit you get from debt consolidation is that you pay one single loan; if you have many loans this is a great way to pay all of them and just remain with this single loan to pay each month. Having multiple loans can be really stressful and paying them can be time consuming. Debt consolidation also has the advantage of a minimum amount of 2000 of debt, so if you are one of the people who are not eligible for a settlement you can easily apply for debt consolidation.
Financial settlement is another debt relief method that only works if you have over ten thousand dollars of unsecured debt; if you don't meet those conditions you cannot apply for debt settlement. A short presentation of debt settlement would be: having your debt negotiates so that you can obtain a reduction and pay the rest of it either in lump sum or in easy installments. The great thing is that you can get reductions of up to 70% with a good debt settlement company. This method is also supported by the government which makes it 100% legitimate. Although many people file for a settlement, only the ones with good companies will get their debt reduced a lot, so make sure that you find a professional company.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
