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There are several key ways to do this, each one with slightly different processes and results.
Debt counselors explained the variations in these processes so you cansee which one might be right for you.
The clear benefit is saving money while paying down debt balances.
The biggest potential drawback to a consolidation loan is when it doesnt solve your spending habits, Lynch explained.
Otherwise, a consolidation loan can become a temporary fix that makes the situation worse in the long run.
However, one requirement is that the accounts included in the plan are closed, preventing further charges.
In the long run, most people see an increase in their credit score.
Worse, the amount forgiven through the settlement will be taxed as additional income.
Its best for disciplined borrowers who wont reaccumulate debt.
Debt settlement is for people who are behind on payments, facing collections or contemplating bankruptcy.
Its not for everyone, but it can help in the right circumstances.
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