Debt Settlement vs. Debt Consolidation: What's the Difference?

Both can simplify your payments, but they work very differently. Here's how to tell which fits your situation.

If you're juggling several credit card balances, you've probably heard of both debt settlement and debt consolidation. They solve different problems.

Debt consolidation

Consolidation combines multiple debts into one new loan, ideally at a lower interest rate. You still repay the full balance, just with one payment.

Debt settlement

Settlement programs negotiate with creditors to accept less than the full amount owed. It can reduce what you pay, but it may affect your credit score.

Which is right for you?

Consolidation tends to suit people with good credit and steady income. Settlement may help people with significant unsecured debt who are already behind on payments.

A free debt review can help you understand your options before you commit to anything.