Understanding your options
Whether you’re looking into managing credit card debt or other debt solutions, it’s important to understand the differences between debt consolidation and debt settlement before you start. Let’s break it down so you can make an informed choice about what’s best for you.
A debt consolidation plan is a debt solution that seeks to make it more manageable for you to pay down your debt using a solid plan through a financial institution. It generally involves evaluating your current financial and credit standing, moving your existing debt into fewer loans (consolidating) to make them easier to pay down, finding ways to adjust your household budget and payment schedules to fit your current needs, and more. The most important aspect of debt consolidation is that this method can keep your credit in good standing.
Debt settlement is about paying a creditor or collections agency to end, or “settle”, your debt obligation. You may end up paying less in total, because they may be willing to settle for less. This option will hurt your credit though, making it more difficult for you to obtain financing in the future; your rates will also most likely go up the next time you need to borrow. This solution also doesn’t address the financial habits that may have created the debt to begin with.
Which is Best?
Our goal is to educate you about your current financial situation, explain the details of the difference between these debt relief solutions, and explain how you can better manage debt in the future.
Live Smarter with expert assistance by making an appointment today to meet with one of our Financial Services Representatives.