Should I Consolidate Debt with a Personal Loan or Try to Settle My Debt?
When you are struggling with debt, it can feel nearly impossible to imagine yourself out of debt. You might be seeking information about options to ease some of the anxiety. Should you consider debt consolidation, for example? Or should you consider trying to negotiate a debt settlement agreement with creditors? According to a recent CNBC report, more and more consumers that are struggling with debt are turning to personal loans for debt consolidation. However, for most of them, these personal loans are not ultimately allowing them to get out of debt. Instead, many of these debtors might actually be better off settling debt and starting fresh.
What should your considerations be if you are weighing debt consolidation with a personal loan versus debt settlement? Our Georgia debt settlement attorney can tell you more.
Consolidating Debt with a Personal Loan Often Does Not Help
As the CNBC report explains, more and more Americans are using personal loans to consolidate debt, and many are also using balance transfer offers from their credit cards. In the shorter term, this type of debt consolidation might save a consumer money. It prevents interest from accruing on debt at particularly high credit card interest rates. It also offers more time to pay off debt without accruing substantial interest. However, the report notes, “without a change in spending habits, that strategy is likely to fail.”
In other words, consolidating debt will not help you to get out of debt if you do not change how you spend. And for most people, these habits do not change. In addition, debt consolidation — whether through a personal loan or balance transfer — still comes with added costs. Debt consolidation involves interest (albeit lower than credit card interest rates) or balance transfer fees.
Why You Should Consider Debt Settlement Instead of Consolidation
Rather than consolidating your debt and adding costs to the debt you already owe, debt settlement allows you to pay a smaller amount than what you actually owe and to get out of debt.
Debt consolidation works by reaching a settlement amount with the creditor. In exchange for paying only a percentage of your total debt, the creditor agrees to forgive the remaining amount. Accordingly, if you can get your budget in relative check, you can come out of debt settlement owing no debt and ideally accruing only debt in the future that you can afford to repay immediately.
Contact a Lilburn Debt Settlement Lawyer for Assistance Today with Your Debt Settlement Negotiations
If you are struggling with debt and may be able to reach a debt settlement negotiation with your creditor or creditors, do not wait. An experienced Georgia debt settlement attorney at Konn Law Firm LLC can discuss your debt and financial circumstances with you today, and we can begin negotiating with your creditors. Once your creditors agree to a settlement amount that is feasible for you, you can pay the agreed amount and be free from the rest of the debt you owe. Contact our firm today to learn more about how we can help you with debt settlement and how debt settlement can benefit you.
Source:
cnbc.com/2026/03/11/personal-loan-credit-card-debt-consolidation.html
