It’s not uncommon to fall into the trap of debt – in fact, most U.S citizens have to deal with payments on money they owe. However, this problem can become even worse for those who have to deal with multiple debts at once.
If you are one of these individuals, you may already know just how difficult, stressful, and expensive it can be to keep up with all the different payments and manage your finances. Fortunately, there are often quite a few things that you could do to make things easier for yourself. Two of the most common methods of paying off debts are debt consolidation and debt settlement; but which one is right for you?
Is it time to take control of your financial situation?
There often comes a part in a person’s life when they want to be free of the shackles of debt. From having a bit of extra cash every month, to not having to keep on top of all your different payments; it’s not hard to see why so many debtors would love to pay off the money they owe.
If you’re in this position, you’ll be glad to hear that you could take action today and put yourself on the path to a debt free future – as well as making your debts more manageable, relieving stress, saving money, and generally making your day to day life much simpler.
What is debt consolidation?
Do you owe money to multiple creditors? Struggling to keep up with the costs and regular payments of each of them? You’re not the only one – but that doesn’t mean that you have to suffer with this burden.
If being able to roll all your different debts into one, more manageable loan with a lower interest rate sounds like a dream come true, you might want to consider taking out a debt consolidation loan to help you out.
Generally, these kinds of loans can give you the chance to combine all your different payments into one – and if you have several debts, you may already have an idea of just how beneficial this can be. But often, simplifying your life by turning all your debts into one payment isn’t the only benefit that can come with these kinds of loans.
Typically, they can also offer you a lower interest rate– which can help to reduce your monthly payments, too. With this and more, it’s not hard to see why taking out a debt consolidation loan can be such a great idea.
What is debt settlement?
Debt settlement, on the other hand, often takes a different approach to helping you out of your debt. Also commonly known as debt arbitration, debt negotiation, and credit settlement; this can often allow a debtor to pay off the sum of cash they owe after coming to a mutual agreement with the creditor for a smaller amount.
If you’re struggling to pay off your credit cards, you’re in luck – as debt settlement is often only used for unsecured debts. This can often include debts on credit cards, as well other types of payments, such as medical bills or student loans.
Almost anyone struggling to keep on top of their payments can benefit from reducing the total sum of their debt, which is one of the main reasons why it can often be a good idea to try and get your creditor to agree to a smaller amount.
Additionally, if you don’t have as much to pay off, your regular payments are likely to be smaller and more manageable too – or you may be able to keep your payments the same and pay off your debt quicker instead.