Skip to Content

Debt consolidation vs. debt settlement

Debt consolidation vs. debt settlement: which is the better solution?

It's a question frequently asked by consumers who find themselves deep in debt: what are the advantages of debt consolidation vs. debt settlement as ways of getting out of debt?

Debt consolidation involves taking out a new loan at lower interest rates to pay off a variety of debts at higher interest rates. Debt settlement involves hiring a company to negotiate with your creditors and get them to settle your debt for a portion of what you owe.

Does debt consolidation work? Is debt settlement effective? Both approaches can work, but both have significant downsides, too. For anyone considering debt consolidation vs. debt settlement, it's a good idea to do your homework before choosing other one.

For an informative appraisal of the advantages of debt consolidation vs. debt settlement, contact American Consumer Credit Counseling (ACCC). We're a non-profit organization dedicated to providing consumers with the information and education they need to make better decisions about debt, and we can help you sort through your debt settlement and debt consolidation questions.

Get advice on debt consolidation vs. debt settlement from ACCC.

At ACCC, we offer free credit counseling, free educational resources, and low-cost services for managing your debt. Our certified credit counselors are highly trained and can answer all your questions about debt consolidation vs. debt settlement, as well as questions about debt consolidation qualifications, the risks of a debt settlement arrangement, the link between bankruptcy and credit card debt, and more.

Debt consolidation vs. debt settlement – are there other options?

When it comes to paying off your debt, it isn't just a question of debt consolidation vs. debt settlement. For many of our clients, debt management is a better choice.

In a debt management plan, you consolidate all the payments you make to various creditors each month, and you make one easy payment to ACCC instead. We turn around and pay your creditors for you, making sure payments arrive on time in order to build trust with your creditors. Then we seek reductions in interest rates and finance charges, and we stop late fees and over-limit fees to help reduce the amount of money you owe.

The advantage of debt management vs. debt consolidation is that you won't be taking out a new loan to pay off old debts. The advantages of debt management vs. debt settlement is that you won't risk falling even deeper into debt. With a debt management plan you'll be paying less in fees, too – we charge very little for a debt management plan, while debt consolidation and debt settlement companies may charge a great deal for their services.

Learn more now about debt settlement and debt consolidation advantages and disadvantages.

American Consumer Credit Counseling (ACCC) is a non-profit debt management company that provides consumers with personalized counseling and solutions for consolidation of debt. Since our founding in 1991, ACCC's consolidated credit counseling services and debt assistance programs have been helping consumers consolidate debts and regain control of their finances. If you're wondering "What's the best way to consolidate my debt?", an ACCC counselor can show you how to consolidate your debt without having to take a loan or pay hefty fees. First, check out our credit counseling reviews to see what our customers have to say about our consolidated credit solutions and the personal touch that helps make ACCC one of America's most well-regarded debt management agencies.

Better Business Bureau Mass Housing Approved National Industry Standards for Homeownership Education and Counseling Council on Accreditation NFCC Member