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How is a Debt Consolidation Loan different from debt settlement?

  • Debt Consolidation: This involves taking out a loan to pay off your existing debts, leaving you with one manageable payment. You are responsible for repaying the full amount of the loan.
  • Debt Settlement: Involves negotiating with creditors to reduce the amount of debt you owe, often resulting in a negative impact on your credit score. Debt consolidation, on the other hand, typically helps preserve or improve your credit score.