Debt Advice Apply Easily Online Today !

Types of Debt Management

 

Debt Management is an umbrella term for a number of strategies that can allow you to solve your financial problems. There are three main types of debt management ;

  • Debt Negotiation – This process consists of a debtor making an arrangement with their creditors without the help of a debt management company. When you use a third-party to do this for you, you will have to pay them a fee. With debt negotiation there is no fee and it’s quite normal for you to end up having to pay off 30-70% of the original debt. A debt management company might be able to help you pay less but they also charge fees so it’s best to weigh out both options.
  • Debt Consolidation - This process involves a debt management company assisting you to get your debt under control. Typically they help you get interest rates reduced from your creditors, which will thereby reduce your total payment. In a debt consolidation arrangement you make one payment each month to the company and that company then makes payments to each creditor. In that way, it is like an IVA. This is an easy option for many people that don’t want to have to deal directly with their creditors.
  • Debt Consolidation Loans – Similar to debt consolidation in that it allows you to put all of your debt in one place and also help reduce the number of payments that you have to make each month. The only difference is that this process involves you taking out one large loan to pay off all of your smaller debts. One disadvantage is that you will have to pay interest on that loan which will add up over time. If you take out a debt consolidation loan using the equity of your home then you can reduce your interest rates. A lot of people are not comfortable releasing equity in their home so it’s best to look at all your options and make an informed decision from there.

Are you eligible for Debt Management ?

Try our simple debt solution calculator to find out.