Debt settlement and debt consolidation both offer ways of reducing your debt. Debt settlement eliminates part of your loans, while debt consolidation reduces interest rates. Even though debt consolidation has the least impact on your credit score, there are cases when debt settlement is a better option.

Debt settlement means that part of your debt is immediately wiped out by your creditor. You will find instant financial relief in your monthly budget. And the rest of your debt payments are much more manageable.

You will also find that you can start rebuilding your credit from this  point on. Instead of juggling late payments, high debt loads, and other factors, you can focus on managing your credit better.
Debt consolidation can also help you get out of debt. With consolidation, a company negotiates lower rates with your creditors. You make one monthly payment to the debt consolidation company, and they handle paying all your accounts.

They also deal with any paperwork hassles, canceling fees, and closing accounts. Usually, you can be out of short term debt in five years or less.

The goal of both debt settlement and debt consolidation is to lower your debt. Debt settlement companies negotiate with your creditors to sometimes reduce the amount of your loans. You will be charged a fee, and the debt reduction will remain on your credit score for seven years.

Debt settlement can reduce your debt 10% to 50%. To get the most out of the program, pay off the rest of your debt as soon as possible. Also, close accounts that you don’t plan on using to raise your credit score.

Debt consolidation pays off your high interest debts with a low interest loan. Home equity loans provide the lowest rates, but personal loans can also be used. With rates lower on your debt, you can pay off the principal sooner by making the same monthly payments.

For instance just go to the site www.debtconsolidationbenefits.com, and you will find more useful information about debt settlement and debt consolidation