When debt becomes too much, some people turn to debt relief to help them through the process. There are two main types of debt relief. Here we’ll discuss those two options as well as some of the pros and cons associated with them.
DEBT CONSOLIDATION
With this method, your debt is consolidated to help you save money on the interest side of things and only having to focus on the principal you owe.
Pros
With this method, you will still be paying off all of your debt so you don’t need to worry about your credit score and report being affected.
Cons
There may be additional fees when it comes to setting up your consolidation. This process may also take longer as you may need time to pay off the total in full.
DEBT SETTLEMENT
With debt settlement, is where you work with the debtors to come to agreement on what portion of the debt you need to pay.
Pros
This is a quick way to settle your debt. Once your portion is paid off, you no longer have to worry about paying interest or other fees.
Cons
This type of debt relief will cause damage to your credit. Each individual debt you settle will cause a mark on your report which may affect your ability to receive loans or lines of credit in the future. If you do receive these, you may have to pay higher rates of interest.
