Debt consolidationand debt restructuring both have a place in managing debt.
Debt consolidation is a strategy that combines your debts.
On the other hand, debt restructuring is when you negotiate with your creditors.
A key difference between restructuring andconsolidating your loanis in the consolidation process.
Then, you make your monthly payment on the new loan.
Which one is right for you?
That depends on what you want to do withyour debtsand how quickly youd like to repay them.
Heard of These Credit Card Debt Tips?
But millions of Americans overlookthese easy tipsthat could help them manage credit card debt even more wisely.
Read moreto boost your credit knowledge and keep your credit score in check.
Beneficially, there are manybalance transfer credit cardswith 0% interest during the introductory period.
Debt management plans
Debt management plans are structured debt repayment programs.
They typically dont require a loan and are offered throughcredit counseling agencies.
What Is Debt Restructuring?
Instead, you negotiate with your creditors to get your interest rate, payments or repayment plan adjusted.
Then, youll continue making payments on the original loans or credit card balances.
Drowning in Expenses?
Maybe youre scrambling after your car broke down.
Or you got a medical bill you werent expecting.
Or inflation has finally pushed your budget over the edge.
You dont need to go it alone.
When money is tight,these resourcescan help you manage unexpected expenses without stress.
Sometimes, debt consolidation reduces your interest rate overall.
That can also help you save money as you pay down your debt over time.
Pros and Cons of Debt Consolidation
Debt consolidation has several pros and cons.
In 10 days,these 10 practical stepscould help you get back on the right financial track.
Which Option Is Best for You?
What is best for you largely depends on your financial situation.
This is especially true if you also have good credit.
Debt restructuring can cause damage to your credit.
The hit from that will likely be less severe than filing for bankruptcy.
Seek credit counseling from a reputable agency if youre still not sure.
Most are nonprofits and can help you with general financial advice and debt management plans.
