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Is debt management better than debt consolidation?

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04 April 2008 As with most questions about debt, the answer is 'It depends'. It depends on the individual. Not just the amount they owe, but their financial history, their attitude to dealing with creditors and their confidence... See more » 04 April 2008 As with most questions about debt, the answer is 'It depends'. It depends on the individual. Not just the amount they owe, but their financial history, their attitude to dealing with creditors and their confidence in their own financial skills. What exactly is debt consolidation? You take out a new loan thats big enough to pay off all / some of your existing debts. This can: * Reduce the interest charges if you owe money to credit cards, store cards and other high-interest debts, theres a good chance you could find a consolidation loan with a lower interest rate. * Reduce the monthly payments you could arrange to pay the loan back slowly, which means each payment will be smaller (but youll have to pay for longer). What exactly is debt management? You ask a debt management company to negotiate with your creditors on your behalf. Depending on which company youre dealing with, they might: * Ask creditors to accept lower monthly payments, waive charges and / or freeze / lower interest. * Reply to letters and phone calls on your behalf. * Handle payments for you you send them one monthly sum, and they pay each of your creditors the agreed amount. Which is right for me? For people who cant keep up with their monthly payments, debt management might be a good idea on Gregory Penningtons debt management plan, for example, everyone gets a Personal Finance Manager, who provides advice and helps them manage their finances, as well as negotiating with their creditors. Debt consolidation might appeal to people who can meet their financial commitments, but want to make their debts more manageable consolidation can really simplify their finances by paying off all those credit cards, store cards and so on. However, it can take self-discipline to avoid the temptation to run up fresh debts on things like cards and overdrafts. Anyone whos not sure they can resist that temptation might be better off with debt management. Plus, in todays credit crunch, lenders have become more cautious about giving people credit, so anyone whos had a lot of financial problems might find it hard to get a consolidation loan. Please note: debt management and debt consolidation arent the only debt solutions out there. People with significant debts might want to look into an IVA (Individual Voluntary Arrangement) or, if they live in Scotland, a Trust Deed. Back to debt management blog home See less »

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debt, debt consolidation, debt management

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Credit card debt consolidation loan combines all the debts of the borrower and pays them off. The credit card debt consolidation loan is taken at a low rate of interest thereby saving money on the high interest debts of the credit cards.

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Debt management or debt consolidation ... which is better?

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Is debt management better than debt consolidation?

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