Pros and cons of consolidating student debt Dating 100 de 2013
The one new loan should have a lower interest rate and monthly payment than the combined cost of the bills you consolidated.The cons to debt consolidation are just as obvious: The debt is not forgiven or even reduced.If your credit score isn’t somewhere above 700, you probably won’t qualify.
This method is most often used to settle a substantial debt with a single creditor, but can be used to deal with multiple creditors.
Throw in bills for rent, cable, cell phone, utilities and on and on, and that’s a lot of accounting to keep up with every month.
If you fall behind on one credit card, it can be an uphill struggle to catch up.
The pros and cons of debt settlement and debt consolidation vary, especially with regard to the amount of time it will take to eliminate debts and the impact it will have on your credit score. When used properly, either can help you get out of debt sooner and save money. The prospect of paying less than you owe — far less in some cases — makes debt settlement an enticing choice for eliminating debt.
It is also a risky one, a How does debt settlement work?