Debt Consolidation - How Consolidation Compares to a Debt Settlement Program

By VS Iyer

Comparing consolidation with a debt settlement is like comparing chop and cheese. Or, it is like comparing a fast based a game of basketball with a slow and relaxed game of golf. However, this comparison is inevitable because people, for some reason, are of the opinion that consolidation is a debt relief option.

In my opinion, only debt settlement and bankruptcy are two debt relief options available in the market. Debt relief is possible only if debt is eliminated. If you have to live with debt, it is not a debt relief option. It is a debt management option or it is an option that helps you tackles specific problems related to your debt.

However, if you want debt relief-settlement is the first option that you should consider. I am sure you are aware of the basic differences between consolidation and settlement. In case of the former, you borrow money from a single lender to repay loans taken from different lenders.

The net effect is that the total amount payable to different lenders now becomes payable to a single individual or enterprise. This makes it easier to manage your debts. You may also get a discount for making repayments before time. However, this is all there is to it. There are no other benefits involved.

On the other hand, an individual who goes in for a debt settlement option will get a fifty percent reduction in the total amount payable, get an installment facility to repay the balance and can or make use of an expert to negotiate and finalize the deal instead of a personally dealing with lenders.

The benefits related to consolidation are dependent on two main factors-stability and regularity of income and the presence of low interest rate raging. If both these conditions are not fulfilled, then you stand to gain very little from the debt consolidation deal.
On the other hand, a settlement deal is designed for those individuals who are at the brink of bankruptcy. All you need is a severe debt problem that has no signs of ending. If you fulfill this condition, you can be rest assured that you qualify for a fantastic debt relief.

For a person who can qualify for consolidation deal, settlement is an unnecessary and very expensively wrong decision. On the other hand, a person who ought to go in for a settlement will gain absolutely nothing from consolidation. It will be like spraying a drop of water into a raging inferno.

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: [http://www.freedebtreductionhelp.com]Free Debt Help.

Article Source: [http://EzineArticles.com/?Debt-Consolidation---How-Consolidation-Compares-to-a-Debt-Settlement-Program&id=4065560] Debt Consolidation - How Consolidation Compares to a Debt Settlement Program