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Advice and Planning,Financial Education

Debt Consolidation Vs. Debt Settlement

Debt Consolidation Vs. Debt Settlement

Written by: Mindy Leisure, Advantage Credit 


At some point in everyone’s life they will be in debt. That debt may be because of a mortgage, auto loan, student loans, or revolving balances. For most of these there is an end in sight as they begin with a specified amount of time to repay the debt. The exception is revolving balances. If we are not careful, those balances can just grow and grow until they feel completely unmanageable and out of control.


At this point some people will look into something called: debt consolidation companies or debt consolidation loans. A legitimate debt consolidation loan is simply applying for a loan with set terms and then using the money to pay off your revolving balances. If the loan has a low enough interest rate this could end up saving a lot of money in the long run as credit card interest rates can vary drastically. Once the revolving debt is paid off, you have just one set payment you make every month to then pay off the loan.



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