Debt Settlement vs Debt Consolidation: What's the Difference?

Debt consolidation is better for your credit score. It repays your full debt through a new loan. Loan settlement involves paying less than what you owe, which damages your credit score and stays on your record for years.

What is debt settlement?

Debt settlement refers to the act of paying a lump-sum amount of the loan taken due to financial stress.

What is debt consolidation?

Debt consolidation refers to combining multiple debts into a single loan at a lower interest rate.

What is bankruptcy? 

Bankruptcy refers to the permanent financial inability to repay the remaining debt. 

Does consolidating credit lower your credit score?

No, it does lower your credit score initially, but later, as you repay the debts, it keeps on increasing. 

Does bankruptcy erase every type of debt automatically?

No, bankruptcy does not erase every type of debt automatically.

Does bankruptcy erase every type of debt automatically?

No, bankruptcy does not erase every type of debt automatically.

Is Debt Consolidation a New Loan?

Yes, debt consolidation usually involves taking a new loan to pay off your existing debts.

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