Before you apply for debt consolidation loans, I strongly recommend you look for some credit counseling first. Undertaking a consumer credit counseling service will get you educated on your available option on how to wipe out debt or manage it. From there you can decide whether you will take credit card consolidation or a debt settlement.

Credit Counseling is also known as Debt Management. It is a process that involves negotiations with your creditors to reduce interest rates and fees on your credit cards so that you can pay one consolidated monthly payment to a credit agency, which is used to pay all creditors. Credit counseling is not a quick fix and usually takes 3-5 years to complete. This is one of the things consumer credit counseling service assistants or counselors will discuss with you. They can refer you to legitimate lenders.

Meanwhile, debt settlement involves reaching negotiated settlement agreements with your creditors to get significant reductions on the principal amount that you owe. It’s the fastest way to get out of debt. It does, however, have a negative effect on your credit score. This is its disadvantage to credit counseling, which will not hurt your credit score and helps you pay down debt responsibly.

Share This