Debt consolidation is the process of combining debts into one loan or repayment plan. Debt consolidation can be done on your own, with a financial institution, or through a counseling service. Student loans are often consolidated in order to secure a lower interest rate.
Debt settlement is the process where you pay an agency to negotiate directly with your creditors in the hopes of making significantly reduced settlements for your debts. Working with a debt settlement company can result in damaged credit from numerous late payments and collection records. Consumers should fully investigate the practices, reputation, and costs of working with a debt settlement company before signing up.