Poor Credit Debt Consolidation & Debt Reduction - Comparing Debt Consolidation Services

Posted by Nick Niesen on October 29th, 2010

Too much debt is a common problem that affects millions of consumers across the country. Eliminating debt is not an easy task. Yet, there are many strategies in place to help consumers reduce unnecessary debts and save money. If you have good credit or own a home, there are practical means of reducing debt. Unfortunately, those with lower scores have fewer options.

Easy Way to Reduce and Eliminate Debt

If you do not qualify for a personal debt consolidation loan, and a home equity loan is not feasible, consider using a debt management service to assist with your outstanding debt.

In the past five years, debt management and consolidation companies have become widespread. These agencies advertise their services on commercials and online. There main objective is to help people manage their debt, and outline a realistic solution for eliminating debt.

Types of Debt Management Services

There are two main types of debt management services. Before choosing an agency, it helps to research both alternatives and select the one that's best for you.

If you have acquired too much debt, a debt consolidation service may be the solution. The primary reason why many consumers are unable to reduce their debts is because of high finance fees and late charges. Debt consolidation agencies recognize the problem, and will work with your creditors to have rates and fees reduced or waived.

Once the creditors and agency reach an agreement, the agency will combine or consolidate all debt into one payment. Payments are made directly to the consolidation service. Because the interest rate is lower, monthly payments are reduced up to 50%.

Debt settlement agencies are different from consolidation services. If consolidating debts, consumers are responsible for repaying the full debt amount. On the other hand, a settlement will cancel out a portion of the outstanding debt. For example, if a person has acquired $60,000 in credit card debt, a debt settlement may reduce the balance owed to $30,000.

Debt settlements are not intended to be an easy fix for extreme credit problems. In fact, the effects of a settlement are damaging. This maneuver will likely result in a lower credit score, and future lenders may be unwilling to extend a line of credit.

Nick Niesen

About the Author

Nick Niesen
Joined: April 29th, 2015
Articles Posted: 33,847

Get Paid to Write Reviews!
BravoCoin is a review app that pays its community for writing & rating reviews of restaurants, hotels, services, movies, video games & more. Signup and claim 10 FREE Bravo coins!
Crypto.com - The Best Place to Buy, Sell and Pay with Crypto
Crypto.com is the pioneering payment and cryptocurrency platform. Through Crypto.com, you can buy crypto at true cost and buy 55+ cryptocurrency such as bitcoin (BTC), ethereum (ETH), Ripple (XRP) and Litecoin (LTC) with credit card through our mobile app
HOTBIT Crypto Exchange
Hotbit is one of the professional digital asset exchange platforms that provide trading services among major digital currencies like Bitcoin, Litecoin and Ethereum for users from all over the world.
Exchange crypto online - Cryptocurrency exchange platform Changelly
Changelly.com is the best instant cryptocurrency exchange platform with the best exchange rates for BTC, ETH, LTC, XRP, ADA and 140+ other cryptocurrencies. You can buy bitcoin and other cryptocurrencies with a credit card or any crypto wallet
Affiliates - Horse Racing Tips - Betinfo24 blog
Earn a full or part time income from recommending our products. Earn commission from our partner site, simply promote our services and receive a commission every time you make a sale! You can promote your unique link on your own betting related website, e
Mining-Mining Rigs-BitDeer | Computing Power Sharing Platform
BitDeer is a platform provides computing power sharing services for users. "Real mining, payouts directly from the mining pool, transparency revenue and flexible service plans". We aim to provide transparent, secure and convenient world-class computing po