What Is The Difference Between Debt Consolidation And Credit Counseling?
The difference between these two things is actually pretty stark: that is, just talking about it versus doing something about it. Credit counseling is the act of paying a professional financial planner to help you get your finances back in order and figure out what has gone wrong. They will tell you what you need to do to fix everything, and may draw up some pretty comprehensive suggestions. They are extremely expensive, but, according to some, also extremely effective.
Debt consolidation, by contrast, is the act of taking out a new, low interest loan with extremely low monthly payments in order to pay off everything else. This is a very effective way to get rid of your debt as the payment will be so low that you can be certain that you will rarely, if ever, miss one. Therefore, you can be certain that you will not hurt your credit any more than it might already have been hurt.
Another difference is that debt consolidation companies, in addition to what was already described above, will almost always contain a credit counseling service. You are paying them with the interest that you owe, so anything else that you get is a freebie. So, even if you count the interest into the cost, in many cases it will be cheaper to consolidate than to hire a $100 an hour or more credit counselor. These are also people who regularly work in the field and are dealing with real life situations, rather than just statistics and theory, therefore you can be certain that you will get high quality advice from them. Another benefit that you get from consolidation over counseling is that consolidation companies will work to reduce your debt by bargaining with your creditors, rather than just figure out how to pay it all off.
Thus, the differences are both small and large at the same time. But overall, in my opinion, if you are trying to decide which of these actions to take, you get greater benefits out of acting now and consolidating rather than paying someone to wait another week. It is possible with consolidation to get your financial life back on track today, and I think that this is what you should do.
Finally, by researching and then comparing several debit consolidation agencies, consumers will be able to identify the agency that meet your specific financial situation, plus the cheapest interest rate the market is offering. Nonetheless, it is recommendable working with a seasoned and reliable debit counselor before even make any decision, this way you will save time through seasoned advise & cash by getting better results in a shorter period of time.
Hector Milla is editor of the Free Debt Consolidation Quotes website – where you can see his top rated debit consolidation service recommendation.
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