Debt Consolidation Versus Debt Settlement
Posted on
August 18, 2009
at
4:10 am
If your debt are mostly secured which is the better option, debt consolidation or debt settlement? Overall, head to head, debt consolidation versus debt settlement, which is the better debt relief solution?
Posted on
August 18, 2009
at
4:19 am
Debt consolidatin versus debt settlement?First, some definition of terms. Debt consolidation is like adding another creditor to all your other creditors. It's obtaining a loan to pay off all the others. Unless your credit is stellar, chances are you won't get the low interest loans, which means additional debts and extended payment periods..not only that, if you use the value of your home to get this loan, you'd get a tax break yes, but you might end up losing your home too.Debt settlement is not a loan. It's a program. It is about negotiating your balance down to more or less 50% (of the original amount).
Posted on
August 18, 2009
at
4:24 am
I think what 99 is trying to say is that it depends on your type of debt. If it is unsecured--debt consolidation loan is a risky choice as you lose your home or you'd be slapped with high interest rates--which would just bury you deeper into debt.If it is unsecured debt--debt settlement would make more sense versus debt consolidation, as you don't stand to lose your property nor be wary of high interest rates. In fact in debt settlement, the interest rate and the principal amount of debt get reduced--which would help you not just reduce debt, but eliminate it.So for unsecured debt, debt settlement makes more sense than debt consolidation loan.
Posted on
August 18, 2009
at
4:30 am
Debt consolidation versus debt settlement..I agree debt consolidation works for consumers with good credit. Credit card companies have this zero percent offer so consumers with better credit would transfer to them. It's good but it's like a trap. Once you miss a payment, they'd increase the interest rate..I'm just not sure if it's still true when the Credit Card Accountability, Responsibility and Disclosure Act takes effect--as one of its provision is that credit card companies must give the consumers 45 days before they can up the interest rates.My vote goes to debt settlement though.
Posted on
August 18, 2009
at
4:35 am
Debt consolidation versus debt settlement in states that prohibit and limit the use of debt settlement...Debt consolidation wins?
Posted on
August 18, 2009
at
4:42 am
In terms of time period: I do not know how long a consumer would pay off the loan, I suppose it depends on the terms of the contract, but the lower the payment is, the longer it'll take to pay it all off, and that means that interest would add up to the total amount too. With debt settlement, it takes 12-36 months to complete.
Posted on
August 18, 2009
at
4:49 am
Debt consolidation versus debt settlement in terms of payment: Debt settlement companies charge 15% of the total debt amount spread over 18 months or a percentage of the settlement amount, usually between 20-25%. You don't really pay the lenders..yet. You are borrowing. But when it's time to pay them, it's like waking up to a nightmare, you ask yourself "wait, wasn't my goal at the beginning to eliminate my debt, how come I'm still paying for it?"
Posted on
August 18, 2009
at
4:59 am
In terms of impact on credit: debt consolidation versus debt settlement?I'm not sure how consolidation loans appear on the credit report, it's listed right? Even if it's already been paid off?But debt settlement stays on your credit report for 7 years from the date the account was settled.
Posted on
August 18, 2009
at
5:05 am
In terms of security?Debt consolidation versus debt settlement?The settlement industry is pretty young and this industry has already generated a lot of complaints and bad reviews. The government, it seems, does not yet have an official or national/federal regulatory board for it. Settlement companies do have associations though, that will guarantee consumer safety. Feel free to correct me on this.Debt consolidation loans on the other hand are obtained from banks usually..or independent lenders. They are really not up to grab the consumer's payment and run away with it, it's more like...they'd earn from the consumer's inability to pay on time.
Posted on
August 20, 2009
at
1:56 am
Veronica asks, "If your debt are mostly secured which is the better option, debt consolidation or debt settlement?"As far as I know secured debts cannot be settled. Your best bet would be to make a payment arrangement with your lender in reference to making payments. Most, if not all debt settlement companies only cater to unsecured debts.Now if you'll be talking about unsecured debts, that would be another story.
Page: 1 2
|
