Besides the remarkable negatives consequences on your credit report, the simple fact of having debt is stressful, reaching the end of the month without cash for free spending after paying off all your bills is at least annoying, then debt management programs like debt consolidation and debt settlement or debt negotiation seem to be a viable option for getting back your finance back in line. Yet, which programs is better? what is the right option considering your personal financial situation?

Undoubtedly, debt consolidation is the most popular debt management program, because you get;

1.- A lower monthly payment

2.- A longer repayment span

3.- A lower interest rate

4.- Just one repayment at month, so your financial management become easier.

5.- You rebuild your credit by paying on time every month

However, with debt consolidation

1.- Your debt is not reduced

2.- The longer the repayment span, the more you pay because of the compound interest

3.- You need a collateral

4.- You turn unsecured debt into secured debt

On the other hand with debt settlement program you get:

a.- Lower monthly payment and lower interest rate, plus just one payment for easier financial management

b.- You save thousands because your total debt is reduced by your debt counselor

c.- Shorter span of time for becoming debt free, usually 12-36 months

d.- You do not need a collateral

However, with debt settlement program

a.- You do not rebuild your credit, meaning your scoring get worst

b.- You are forced to find a trusted and reliable debt counseling company

As you can see there are advantages and disadvantages associated to each program, then deciding which one is the best option is depend on you and your personal financial situation, your debt counselor designing a debt management plan that suits perfectly your needs.