Home > Settlement | Consolidation | Personal Loans

Settlement | Consolidation | Personal Loans

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Settlement

In a settlement process, a third-party agency negotiates with a lender or a creditor and agrees to reconcile the entire debt through a lump sum amount that is usually lower than the outstanding balance.

  • PROS:

  • Helps you swiftly settle your financial problems

  • Might result to higher charges and will cost more than the actual amount due

  • CONS:

  • A quick but a temporary answer to your money issues

  • Creditors may not be inclined to settling

Consolidation

The process of consolidating debt is to join together all of your accounts and clump them together into one enormous, singular debt. Borrowers usually take out a big loan with a more affordable installment option or more moderate interest rates to repay several creditors.

  • PROS:

  • Does not need downpayment or collateral

  • Provides a more reasonable payment plan

  • Quick and easy processing

  • CONS:

  • Can affect your credit score rating

  • May lengthen your payment terms

Happy young couple with documents calculating finance at home
Couple in meeting with a financial adviser in living room

Personal Loans

Borrowing money from financial institutions, friends, or family is called a loan. Personal loans may or may not require collateral or downpayment with varying rates depending on the organization.

  • PROS:

  • A quicker and easier solution to becoming debt-free

  • CONS:

  • Long approval time

  • May have more expensive interest rates