Debt consolidation and debt settlement are two financial help options available for those who are struggling with more debt than they can repay. A Payday Loan Debt Consolidation plan combines debts from numerous creditors to instead offer a single loan that pays all of them, typically with lower monthly payments and at a reduced interest rate.
Often, people use these terms in the same way, as if they mean the same thing. In reality, these two solutions are very different options for debt relief.
We’ll look at what each of these options is, along with the pros and cons that come along with them.
Debt Consolidation
A debt consolidation plan combines debts from numerous creditors to instead offer a single loan that pays all of them, typically with lower monthly payments and at a reduced interest rate. Often, this option is best for those who are trying to keep up with bills for multiple payday loans, credit cards, and unsecured debts.
Debt Settlement
With a debt settlement, you’ll be negotiating with creditors to settle a debt for less than what is owed. This is most often used when there is a single substantial debt with a single creditor, although there may be options with multiple lenders, as well.
Pros and Cons of Debt Settlement
The possibility of paying less than you owe, sometimes far less, makes debt settlement an attractive option when it comes to eliminating debt. However, it’s also a risky option, and many experts in the finance field suggest you only do this as a last resort.
Read More: https://realpdlhelp.com/the-difference-between-debt-consolidation-and-debt-settlement/
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