Some people opt for debt consolidation instead of debt settlement and want to get rid of many payments and prefer making a single payment. But is it a wise option to exercise?
It was impossible to get loans for bad credit history in the past but now the situation has changed due to the recent financial crisis.
It is important to understand the concept of debt consolidation loan before you exercise this option. You also need to know IF debt consolidation is favorable for you.
Debt consolidation loan is an unsecured loan which you take to pay off other smaller but unsecured loans.
After you exercise this option, you have only one monthly payment to make rather than many smaller payments.
Debt consolidation loan may pay off all of your unsecured loans but you may never get out of this debt EVER.
Get a quote from various debt consolidation loan companies or individuals and compare their rates and calculate the interest that you will have to pay till this debt is settled.
The thing is when you go for debt consolidation you do nothing to settle your debt. The debt remains there and it does nothing but puts extra burden on you.
Debt settlement is a better option as a debt settlement company negotiates terms with your creditors and pays them in full so your credit rating is not affected to that extent.
Once you go for debt settlement, you stop making payments to your creditors you take the money that you were paying the creditors, and instead put it into a savings account.
Then you make lump sum settlements with each of your creditors, often for dimes on the dollar(tm).
Now you can rebuild your credit rating which takes a lot less time than you would imagine. And you are free and clear of all debts and can start living your life the way God intended instead of consolidating your debts into another loan and perpetuating the problem.
Debt settlement is indeed a good option compared to debt consolidation.
It was impossible to get loans for bad credit history in the past but now the situation has changed due to the recent financial crisis.
It is important to understand the concept of debt consolidation loan before you exercise this option. You also need to know IF debt consolidation is favorable for you.
Debt consolidation loan is an unsecured loan which you take to pay off other smaller but unsecured loans.
After you exercise this option, you have only one monthly payment to make rather than many smaller payments.
Debt consolidation loan may pay off all of your unsecured loans but you may never get out of this debt EVER.
Get a quote from various debt consolidation loan companies or individuals and compare their rates and calculate the interest that you will have to pay till this debt is settled.
The thing is when you go for debt consolidation you do nothing to settle your debt. The debt remains there and it does nothing but puts extra burden on you.
Debt settlement is a better option as a debt settlement company negotiates terms with your creditors and pays them in full so your credit rating is not affected to that extent.
Once you go for debt settlement, you stop making payments to your creditors you take the money that you were paying the creditors, and instead put it into a savings account.
Then you make lump sum settlements with each of your creditors, often for dimes on the dollar(tm).
Now you can rebuild your credit rating which takes a lot less time than you would imagine. And you are free and clear of all debts and can start living your life the way God intended instead of consolidating your debts into another loan and perpetuating the problem.
Debt settlement is indeed a good option compared to debt consolidation.
About the Author:
Looking to find the best deal on Debt Consolidation #1, then visit www.financialsuccessinstitute.org to find the best advice on Debt settlement #2, for you.
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