Debt Consolidation Vs Debt Settlements - What to Consider When Making the Choice
If you use the internet to examine your debt relief options, you will find settlement and consolidation.
Right away you might want to compare the two side-by-side; debt consolidation vs debt settlements.
Comparing the pros and cons of each side-by-side is a great way to determine which one works best for you, but what points should you take into consideration when doing that comparison? Debt Consolidation vs Debt Settlements: Factors to Consider How much money you owe: This plays a couple of important roles.
If you have more than $10,000 in debt, you will want to examine settlement because the amount you owe is lowered.
Basically, your creditors agree to reduce or eliminate a percentage of your total debt.
This means it is easier, quicker, and much less of a hassle for you to payoff what you do owe (which is now much less).
If you owe more than $10,000 you can go with consolidation instead but you often end up owing the same amount of money.
You basically just buy yourself time because your consolidated loan comes with an extended term.
The more you owe, the longer it will still take it for you to live debt-free.
How soon you want to get out of debt: As mentioned above, settlement is designed to reduce what you owe.
On the other hand, consolidation just makes it easier for you to pay what you do owe.
Now, some professional debt relief companies will do a consolidation and a settlement, but this is kind of rare.
Once again, it all goes back to how much money you owe.
If you owe $150,000 to the credit card companies, it could easily take you 15 years to payoff this balance.
If that amount was reduced down to $75,000 we are looking at only 7 or 8 years instead.
There has really never been a more advantageous time for consumers to try and eliminate unsecured debt.
Creditors are very concerned about collecting and most have government money to make eliminating some of your debt financially feasible.
Right away you might want to compare the two side-by-side; debt consolidation vs debt settlements.
Comparing the pros and cons of each side-by-side is a great way to determine which one works best for you, but what points should you take into consideration when doing that comparison? Debt Consolidation vs Debt Settlements: Factors to Consider How much money you owe: This plays a couple of important roles.
If you have more than $10,000 in debt, you will want to examine settlement because the amount you owe is lowered.
Basically, your creditors agree to reduce or eliminate a percentage of your total debt.
This means it is easier, quicker, and much less of a hassle for you to payoff what you do owe (which is now much less).
If you owe more than $10,000 you can go with consolidation instead but you often end up owing the same amount of money.
You basically just buy yourself time because your consolidated loan comes with an extended term.
The more you owe, the longer it will still take it for you to live debt-free.
How soon you want to get out of debt: As mentioned above, settlement is designed to reduce what you owe.
On the other hand, consolidation just makes it easier for you to pay what you do owe.
Now, some professional debt relief companies will do a consolidation and a settlement, but this is kind of rare.
Once again, it all goes back to how much money you owe.
If you owe $150,000 to the credit card companies, it could easily take you 15 years to payoff this balance.
If that amount was reduced down to $75,000 we are looking at only 7 or 8 years instead.
There has really never been a more advantageous time for consumers to try and eliminate unsecured debt.
Creditors are very concerned about collecting and most have government money to make eliminating some of your debt financially feasible.
Source...