To answer the question presented in our title, let us focus on how you will find out if debt consolidation loan is better than debt settlement.
First of all, you need to check your income versus your expenses. If you have more income over your monthly expenditure, then you can get a loan to pay off your other debts. You can help increase that difference further by lowering your spending to increase your disposable income (which is where you will get your debt payment fund). If your expenses are more than your income, then you have to resort to debt settlement.
To be able to make debt consolidation loans work, you need a steady income. This is actually a requirement of the lender. No one will give you a loan if you don’t have a steady income as proof that you can pay back what you are borrowing.
While it is not really a factor in the disapproval of a loan, a good credit score will help you maximize the benefits of a debt consolidation loan program. Like in any type of loan, it helps in getting a low interest rate. A person with a low credit score is perceived to be a high risk borrower. That automatically gives you a high interest rate on your loan.
Consolidating your debts through a loan will only result in a minimal reduction in your monthly debt payment. If this is alright with you, then you can proceed with this debt relief option. The reduction will come from the lower interest rate that this program will bring your current credit obligations. So if you cannot find a loan that has a low interest rate, then this might not be the best option for you. Not only that, if you need a significant deduction on your outstanding balance, debt settlement is best for your case.
If you are also concerned about your credit score being affected by your debt relief efforts, debt consolidation loans have the lesser impact compared to debt settlement. You can choose the former so your credit score will not decrease extremely.
To find out if consolidation loans can help you manage your debts, visit National Debt Relief. Eliminate your credit card debt through the help of our debt relief professionals. Give us a call - the first consultation is free of charge and holds no obligations.