Compare Debt Settlement Firms
What is Debt Settlement
Ways To Pay Off your Debt
Debt Consolidation Loans
Debt Consolidation vs. Debt Settlement
Debt consolidation: Debt consolidation is where a personal loan is used to convert revolving debt (like credit cards) to installment debt, potentially with a lower interest rate.
Debt settlement: Also known as “debt reduction”, debt settlement is where a company negotiates a lump-sum payment with your creditors for less than what you owe.
If debt reduction is what you’re after, be certain that you choose one of the top reputable debt settlement companies to avoid scams and ripoffs.
Benefits of Paying Debt
Handled responsibly, a personal loan has several financial benefits that include:
- Lower credit utilization rate
- Improved credit score
- Better chances of qualifying for lower interest rates in the future
Lastly, here are a few things to keep in mind about using a personal loan to manage your debt:
- There’s no guarantee that your interest rate will be lower. That’s why it’s important to shop around to see the available options.
- Debt consolidation restructures debt, it doesn’t eliminate it.
- To pay down debt effectively, it’s important to practice good spending behavior and form better habits around credit and money management