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Bronco Partners wants you to know that unsecured debt is a burden for everyone. But, it doesn’t have to be: Review Bronco Partners‘ debt consolidation loan and you’ll find that your debt can be manageable and affordable.
A Bronco Partners debt consolidation loan lets you prioritize what’s important to you—your retirement, a fabulous vacation, or even that new oven you’ve been eyeing. Life’s possible with Bronco Partners.
Credit cards, student loans, mortgages, and others; debt is a living reality for everyone these days. What makes a difference is managing them effectively. However, this can be a little overwhelming to achieve.
This means there might be a time where your debt becomes an issue. This is where debt management comes in. You can opt for debt management via two methods, namely: debt settlement and debt consolidation.
Debt Settlement vs. Debt Consolidation
Debt settlement and debt consolidation are two types of debt relief that can assist you in managing your debt. These debt relief solutions have different functions with their pros and cons. This means you will have to understand them well before you decide on one. For instance, debt settlement helps reduce the outstanding debt, while debt consolidation helps reduce the total number of lenders or creditors you owe money to.
The right debt relief solution for your needs depends on your unique situation and requirement, including your credit score, overall finances, and other factors. This article will explore the debt settlement vs. debt consolidation debate thoroughly along with finding which solution would be the best pick for you and your financial conditions.
It is a type of debt relief that helps borrowers reduce the number of creditors by paying off their total debt. It benefits you by making a kind of bargain where you don’t pay the entire balance but pay a lesser amount of the debt you owe.
Debt settlement is considered a little risky, and we suggest you choose to go this route only when you’ve run out of options and this is is your last hope. Many professionals might still ask you to explore different options; however, it may be the best option if you are done or fed up with trying all different solutions.
You should be aware of various risks and threats involved in settling the creditors, violating bills, and other debts they owe so that you know what you are getting yourself into. Debt Settlement affects the credit score and damages your credit report. On the other hand, it is not guaranteed that creditors will accept your proposal for paying less to settle your debt. They have the right to sue you for not paying the debt you owe.
If you have a good relationship with your creditors and are comfortable convincing them to reduce the amount and settle your debts, you can manage your debt independently. Many companies offer to bargain with your creditors on your behalf, but they charge a fee, and they have a certain percentage of the entire settlement; the percentage varies from company to company.
Debt settlement is considered a complex and risky solution and should be your last resort. Many financial experts advise that people choose the debt settlement route only if they are done trying other alternatives. Several other options are quite better with lesser risk factors. Here are some of the reasons why you should choose debt settlement:
Debt settlement is an option when you don’t have sufficient credit, and all loans have been rejected for the settlement.
Debt settlement is the right option if you don’t want to get bankrupt.
When your debts are overwhelming, they can affect your credit report due to violation and unmanageable debt, you might consider debt settlement.
Rather than outsourcing a debt settlement firm, you can work with a credit counseling agency to manage your financial burden, which is comparatively a better option.
Here are some of the pros and cons of debt settlement:
- It helps reduce the entire amount of the loan you owe to the lender.
- It gives you relief from debt stress much faster.
- It might affect your credit score and impact future terms, such as employment opportunities, credit availability, loans, etc.
- Sometimes creditors don’t agree with your proposal and might not negotiate for a lesser amount.
Debt Consolidation With Bronco Partners
Consolidation is a type of debt relief that helps you pay old debts by taking out a new loan. It usually combines all the different debts into one, easing your stress significantly.
Debt consolidation may help you reduce the number of creditors so you can easily manage the cash channel. For example, you owe a sum of $12,000 on two different credit cards. You can avail of a personal loan worth $12,000 and clear the debt you owe. With the new debt, you will have to pay easy monthly installments on lower interest rates.
In general, it might seem easier to pay off old debts by taking out new ones. However, multiple loans can put you in serious financial trouble if you can’t manage them. On the brighter side, it provides more control and clarity over your dues.
It would be best if you opted for debt consolidation in the following circumstances:
Combining multiple dues into one loan is an effective way of managing your debt when you find paying off multiple monthly installments difficult.
Debt consolidation would be the right choice when you can get a consolidated debt for a lower interest rate, lowering the amount of the monthly payments..
When you are stressed about paying off multiple bills and loan payments, it helps reduce the interest rate and strengthens your financial position.
When you’re stressed and dealing with the financial burden, you can always rely on credit counseling services. They help you make a timeline for paying off your dues. Unlike debt consolidation, the professionals don’t convince or bargain with creditors to pay less on your behalf, but they work on reducing your interest fees and rate.
It becomes much easier to repay the amount you owe with single monthly payments forwarded to the creditors from the credit counseling agency with an appropriate plan.
Here are some of the pros and cons of debt consolidation:
- By consolidating your debts, you can decrease your entire interest rate.
- You don’t have to make multiple re-payments every month.
- Different charges are also incurred while availing debt consolidation loans, such as annual fees, closing costs, balance transfer fees, origination fees, etc.
- It doesn’t solve your financial crisis. While it’s a kind of relief from multiple payments, you still owe dues.
Debt settlement and debt consolidation are the types of debt relief that can help you reduce your financial burden and mental stress to a great extent. However, it could be a disaster if you choose the wrong one. Make sure to go through all the pros and cons we have mentioned above and determine if the solution makes sense for your financial status so you can make a wise decision. Good luck!
Benjamin is a technology enthusiast. He formerly consulted and handled communications for multiple tech startups. Now he works with the Elgin Digital Network as a full-time journalist and is given the freedom to explore finance, history, and the arts.