Know more about Debt Negotiation Vs Debt Consolidation!
If you need debt assistance or if you want to pay off your debt, debt consolidation and debt negotiation are two of your options. But there are some people who are rather confused with these two terms. You need to differentiate these two to be able to choose the right method for you. Understanding both of this financial method to clear off your debt can help you in determining the best program that will suit your needs.
Debt Consolidation
Debt consolidation is where you have a prearranged debt repayment from most collection and credit card companies. When you enrol in this program, you will be paying a lowered monthly payment which is based on a much lower interest rate that the company negotiated with the creditor.
Debt consolidation can give you a lot of advantages. It can help you pay off your debt on a lowered monthly statement that you can afford. This is one of your best options if you want to clear off what you owe. You will no longer be harassed by your creditors knowing that you are on a new payment scheme that you can pay off at your own pace/
If there is one disadvantage of a debt consolidation- it is the fact that you need to cancel all your credit cards. You will also have to pay monthly administration fee and pay for your first payment.
Debt Negotiation
Debt negotiation is also called as debt settlement. This is an alternative method of paying off your debt if debt consolidation doesn’t work for you. In debt settlement, the financial company you hired will negotiate with your creditor to lower down your past due balance. At this point, you will stop making payments and the debt negotiation company will pay monthly payments in your behalf.
Debt Negotiation Company can possibly lower down your debt balance to as much as 40 – 50% off. And once they agreed on a certain price, the company will give them a one time payment. Being in a debt negotiation can lower down your credit score. Most of these companies also offer credit repair service to improve your credit rating.
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alok
Hi friends, my name is Alok Vats, and I am the owner of this website I News India. From last six years I am trying to build this website, I started this website from scratch and then with the help of my friends like Pooja, Prachi, and Divya I published many articles over here. Recently Harshita, Tanmay and Aayushi too joined my website, and am really glad to share some articles written by them over here. I am sure many of you would love the same. These days I am managing the site with myself only and the focus is to share blogs on the topics like Blogging Tips, Self Improvement, SEO, and all other things which can make you to enhance your life.
