Debt Settlement Or Debt Consolidation - What"s The Best Option For Your Finances?
Debt settlement and debt consolidation are two methods that can be used in case you need debt assistance.
These two variants can help you to get out of your entire financial problems.
If you are unable to pay back your unsecured debt on time then you should probably go for either of them depending upon your requirement.
Let's discuss both of them in detail: Debt Settlement - A settlement is used to negotiate your debts with your creditor.
According to the new laws passed by the government you can negotiate you debt to about fifty percent or lesser amount.
It is also knows as debt negotiation.
You can negotiate the debt on your own or you can hire the services of a professional debt settlement firm.
These new laws state that any American citizen is eligible for debt settlement if loan amount exceeds ten thousand dollars.
The firm you hire for negotiation services should be legitimate.
All the debt settlement firms in the settlement industry works on contingency basis i.
e.
they only get paid if your debt was successfully negotiated.
You can pay back the rest of the negotiated debt as a single amount or in monthly installments.
However it is important that you do not miss any monthly installments as it can increase the debt amount.
The disadvantage of debt settlement is that your debt amount must exceed $10k and your credit rating has lower points until you don't clear off the remaining amount of the negotiated loans.
Debt Consolidation - It refers to a pre-planned repayment of debt with most of financial institutions and banks.
Consolidation gives you the freedom to pay monthly payment at a lower amount that is interest rate on you unpaid debt is reduced by the debt consolidation company as deal between them and your creditor.
You save a lot of money as the amount of monthly payments are reduced quite significantly.
It is important that you do not miss any of the monthly installments as they can result in increased interest rate once again.
The limitation involved with debt consolidation is that you have to cancel all credit cards on which you have to repay the debt.
In addition to this you will be charged monthly administration fee by the consolidation company which can range from ten to fifty dollars.
Depending upon your requirements and financial condition you can select the one that suits you the best.
These two variants can help you to get out of your entire financial problems.
If you are unable to pay back your unsecured debt on time then you should probably go for either of them depending upon your requirement.
Let's discuss both of them in detail: Debt Settlement - A settlement is used to negotiate your debts with your creditor.
According to the new laws passed by the government you can negotiate you debt to about fifty percent or lesser amount.
It is also knows as debt negotiation.
You can negotiate the debt on your own or you can hire the services of a professional debt settlement firm.
These new laws state that any American citizen is eligible for debt settlement if loan amount exceeds ten thousand dollars.
The firm you hire for negotiation services should be legitimate.
All the debt settlement firms in the settlement industry works on contingency basis i.
e.
they only get paid if your debt was successfully negotiated.
You can pay back the rest of the negotiated debt as a single amount or in monthly installments.
However it is important that you do not miss any monthly installments as it can increase the debt amount.
The disadvantage of debt settlement is that your debt amount must exceed $10k and your credit rating has lower points until you don't clear off the remaining amount of the negotiated loans.
Debt Consolidation - It refers to a pre-planned repayment of debt with most of financial institutions and banks.
Consolidation gives you the freedom to pay monthly payment at a lower amount that is interest rate on you unpaid debt is reduced by the debt consolidation company as deal between them and your creditor.
You save a lot of money as the amount of monthly payments are reduced quite significantly.
It is important that you do not miss any of the monthly installments as they can result in increased interest rate once again.
The limitation involved with debt consolidation is that you have to cancel all credit cards on which you have to repay the debt.
In addition to this you will be charged monthly administration fee by the consolidation company which can range from ten to fifty dollars.
Depending upon your requirements and financial condition you can select the one that suits you the best.
