Finding the right debt relief option can be tricky. Given that using the wrong debt solution can lead to even greater financial distress, it’s important to familiarize with these concepts so you can make an informed decision.
What is Debt Consolidation?
This financial process rolls multiple debts into a single, consolidated monthly payment. The goal being to reduce the interest rate, which allows you to get out of debt faster, even though you pay less each month.
However, debt consolidation is not a one-stop fix for all of your financial worries.
When is it NOT A Good Option?
- If you have bad money habits or issues maintaining a healthy budget, debt consolidation will only delay your financial problems.
- If you have out-of-control credit card bills, it may be appealing to roll those debts into your mortgage and deal with that new fixed payment every month. Just remember – if you fail to pay your credit cards it could go to collections or you could be sued. If you default on your new combined mortgage payment then you could lose your house.
- When you consolidate your debts, old accounts are closed and replaced by one new account. If you are concerned about your credit score then this might not be in your best interest.
What is Debt Settlement?
Is a process where you pay back a portion of what you owe in exchange for a full discharge of the remaining balance. Simply put, you settle your debt for a percentage of what you owe. The settlement is usually made in a single lump-sum payment
What are the Advantages of Debt Settlement?
- Settling your loans can mean paying a lower overall interest rate on your debt which will save you money.
- Unlike a debt consolidation or credit counseling plan, debt settlement can help you pay a much lower amount than what you originally owed.
- Debt Settlement allows you to pay off what you can without having to destroy your credit like a bankruptcy can.
- Debt Settlement also offers a greater level of privacy, putting you the consumer more in control of the process and a lower overall cost than other debt relief options.
If Debt Settlement is the best option for you, contact
THD Credit Consulting.
We help settle credit card debt, home equity lines of credit, collection accounts and charged off accounts. In most cases we can save you up to 75-80% on the amount that was owed and stop all the harassing phone calls.