There are several routes to consider to help ease you of your financial crunch before completely yielding to bankruptcy or contemplating running away from it. The three most practical solutions to obtain funding for paying off debt are Debt Consolidation, Debt Settlement, and Personal Loans:
In a debt settlement agreement, a third-party firm acts as a mediator and connects with the creditor on your behalf to settle your debt for an amount that is typically less than the outstanding amount due.
This could come as a practical solution to settling your debt but could also potentially run the risk of costing more and hurting your credit rating.
Helps you settle matters quickly with creditors
Might be costlier in the long run
A fast but brief solution to your debt problems
The decision to settle is dependent on the creditor
Taking out a new loan to pay off several others is called consolidating debt. In debt consolidation, several debts are collectively adjoined for the price of one.
Does not require collateral
Usually less costly in monthly premiums
Fast and easy processing
Could potentially harm your credit rating
May have higher interest premiums than banks
Longer payment increments
Personal Loans are typically applied through banks, credit unions, or lending agencies. Applying for a personal loan means to borrow funds at a fixed interest rate with a fixed installment plan. If you do decide to apply for a personal loan, be sure to consider the interest rate and the payment schemes available for you.
A more direct method of paying off your overdue bills
An effective solution for shaking off creditors
Takes time to be approved
Does not necessarily solve the exact problem of your financial trouble
May end in higher interest premiums