what are the differences among three popular credit repair services
DESCRIPTION
Here are the differences among three popular services, how does each program work and what are the risks involved in signing up for one of these credit repair services.TRANSCRIPT
Three Popular Credit Repair Services
Debt Consolidation Loan
Debt Settlement
Debt Management Program
The Differences Among...
Debt Consolidation LoanDebt Consolidation is a program in which you will receive
a loan that will settle all your credit and debts. A bank or a credit firm will compute all your debts from different
creditors and provide you a lump sum to pay for all your debts. After paying your debts, the next thing you need to do
is to repay the loan, plus the interest and additional fees charged on it. You will be required to do so in single
monthly installments until such time that you are able to pay for all the money owed.
But, of course, there are risks involved. Some debt consolidation services impose high rates of interest and a lot
of transaction fees. Also, this service may require you to provide your house as a security for the repayment of the
loan. If you fail to repay it, the creditor may repossess your house and leave you homeless. So, you need to weigh the benefits and the risks involved in taking this type of credit
repair service.
Debt Management Program
A debt management program on the other hand, makes use of a credit counseling agency that will help you solve
your financial problems. Through the assistance of a counselor, you will be able to attain a better picture of
your financial status. The counselor will also provide you a tailor fit debt repayment program for you to finally settle your credit. You will find out that this program
involves the least amount of risks as long as you remain faithful to your monthly loan repayments.
Debt SettlementThe last credit repair service that we will discuss is debt settlement. In this service a
company will negotiate with your lenders so that you will just pay a portion of your total
debts. But there is a catch in this service. Some companies will require you to pay them
for their services even though they are not able to negotiate with your creditors. You may also incur tax issues and a lower credit rating once you get this credit repair service. So you need to read closely the terms and conditions provided in debt settlement programs so that
it will work out to your advantage.
Be aware of these differences, benefits and risks associated with each of these programs and for sure you will be able to identify which of these credit repair
services will work best for you!
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