Debt Consolidation Programs & Debt Settlement Programs - What is the Difference?Most of us make the mistake of treating credit card consolidation or other unsecured debt consolidation measures at par with debt settlement. There is a huge difference between these two options.
By: matt couch Instead, a higher proportion of your repayment shall go towards reduction of the principal amount owed. It is but obvious that you should be in a position to pay the monthly installment without any difficulty. If you find it difficult to arrange for the installment, then consolidation will not be very beneficial. In fact, your consolidation loan provider will be irritated with the fact that you borrowed the money despite knowing that you are not in a position to pay the same. If you want to find out whether you need consolidation or settlement, the first question that you should ask is whether you are in a position to make the monthly payment without any difficulty. If yes, then you should skip settlement and opt for other remedies including consolidation. If no, then you should opt for measures that will help you to get rid of the immediate problem without any long term negative effect on your finances. The difference between consolidation and settlement should reflect in your choice of experts as well. Negotiation for a discount, when repaying your debt in lump sum by getting a consolidation loan is not very difficult. You can always play hardball because the money is in your hands and the lender has a higher temptation to help you out. On the other hand, if you opt for the debt settlement, personal negotiation will be very difficult. The lender would be in a dominant position as the option of legal remedy will always be open. On the other hand, you would be in weak position because you would be in drastic need of fifty to seventy percent settlement to avoid bankruptcy. Your lender may repeatedly ask you why you should be entertained and your request should be approved. This is enough to put a spoke in all your negotiation and settlement plans. That is the reason why it is advisable to employ professionals. You will have to pay a fixed percentage of the amount saved as fees. This is not a big problem because the settlement company will be paid only if it secures a waiver for you. If it does not do its job properly, then its income too will automatically come down. This is how genuine company works. If you are over $10k in unsecured debt it would be financially prudent for you to consider a debt settlement. There are organizations that exist called "Free Debt Relief Networks" that are a great place to start in locating legitimate debt settlement companies in your region. They provide free debt help and know where to locate the top performing debt settlement firms. To get free debt help check out the link below:Free Debt Advice (http://www.freedebtsettlementsolutions.com/ # # # FreeDebtSettlementSolutions is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal. http://freedebtsettlementsolutions.com End
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