Pros cons consolidating your debt
Both debt settlement and debt consolidation are ways to manage debt that has become overwhelming.
Each has different requirements and results, so compare to see which plan is best for you.
At a very basic level, debt settlement is useful for reducing the total amount of debt owed, while debt consolidation is useful for reducing the total number of creditors you owe.(For related reading, see "Debt Consolidation: When It Helps, When It Doesn't.") A debt settlement strategy does not seek to replace existing debt with a new loan, as consolidation does.Instead, debt settlement is a series of negotiations between your creditors and you (or a credit counselor) to make pay less than you currently owe, usually in a lump-sum payment.Debt consolidation and debt settlement are both forms of debt relief.With debt consolidation, you transfer your debts into one master account, typically a personal loan or balance transfer credit card, which allows you to simplify how you make payments and often lengthen the repayment term to ease your debt burden while you work on paying your debts off.