Debt Settlement Avoids Credit Checks With Debt Consolidation

Debt consolidation involves many financial risks if you have bad credit, which is why people often select debt settlement to solve their debt problems. Debt consolidation requires a credit check prior to you obtaining a loan, while debt settlement allows you to enroll in the program without a credit check.

Debt consolidation involves you obtaining a loan from a financial institution, typically a bank, credit union or savings and loan association. Once you receive the debt consolidation loan, you direct the funds toward paying off all your high-interest debts. However, your loan lender determines your interest rate and payment terms based on your credit history. If you have bad credit, the lender may refuse the loan or offer it at a significantly high interest rate, making the loan an expensive option to eliminate debt.

Instead of enduring the approval process for a debt consolidation loan, you can enroll in a debt settlement program to pay off debts. The debt settlement company allows its clients to enroll without a credit check, and you can save more money than using a debt consolidation loan.

Debt settlement companies work on your behalf to relieve debt problems by entering into negotiations with your creditors to reduce the amount of owed debt. With debt settlement, you pay only 40 to 60 percent of your original debt principal, and since you pay less toward each debt, you become debt free in a short time.

The benefits of debt settlement outweigh those of debt consolidation. You save more money, reduce debt quicker and avoid a credit check with debt settlement.

Unsecured Debt Consolidation Loan: Cushioning Without Pledging

Nobody wants to be a debtor. If you have a number of debts that you are trying to repay on each month then you may be able to benefit from a debt consolidation loan. The process is of different sorts according to debtors financial feasibility. Some of the debt consolidation loan contains the ceremony of collateral placing, however some of consolidation process keeps no pledging placing. The latter comes under the category of unsecured debt consolidation loan. With this debt consolidation process, a single creditor helps get rid of entire of a debtor s debts in a systematic manner.

Obviously, different loans contain varied rates of interest. Satisfying entire of the lending community with ordinate repayment gets quite tougher. In such situation, under the provision of an unsecured debt consolidation loan, a good amount of money is sanctioned to the debtors. To this effect, borrowers get the required sum of money which is invested into repaying debtor s debts.

If you are seeking professional help in reducing your debt load, you may wonder what exactly the service entails. While each unsecured debt consolidation loan differs slightly, there are some common denominators. At most companies offering unsecured debt consolidation loan, you will be assigned a counselor or given some information about debt. Debt and some financial terms will be explained to you. Then, you will be asked to sign a contract or agreement with the company. At this point, you will not have to do much. The company will contact your creditors and try to negotiate lower late fees and lower fees in general for you. You will then pay the debt consolidation company a monthly amount. You use the sanctioned money to pay your creditors.

There days, market is crowed with lenders. Due to more people for this cause, some of the time, debtors are unable to understand the terms and conditions of an unsecured debt consolidation loan. To fight away from such hustle-bustle, lending bodies have started dispensing their unsecured debt consolidation loan via online. The process is very simple, and debtors could able to get the required sum instant since there is no pledging placing.

By: Simon Peyton. Simon Peyton has done his masters in finance from CPIT. He works for any type of unsecured debt consolidation loan, cheap home loan, secured loans, debt consolidation mortgage, and cheap secured loans.