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What is the difference between a Debt Consolidation Loan and a Debt Management Program?

11/8/2017

3 Comments

 
3 Comments
Mike Lee
11/8/2017 12:25:11 pm

These types have two main differences. When enrolling in a debt management program, no loan is needed. The client agrees to pay the debt management company (or credit counseling agency) one payment that will be passed along to all accounts enrolled in the program. In contrast, a consolidation loan is offered through a company that specializes in this form of debt management. The client’s multiple accounts will be paid with this one loan and the client will then make a monthly payment to the company to repay the loan.

They also differ in that a debt management program is typically done through a nonprofit credit counseling agency and includes financial education to ensure the client is empowered to make healthier decisions for financial stability long after they finish repaying their debt.

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Mike Lee
11/8/2017 12:49:36 pm

There are two kinds of debt consolidation. One type requires you to apply for and receive a consolidation loan to replace all past debts and bills. Your past creditors will be paid and you will now owe a monthly payment to repay your new balance with the consolidation company who supplied your loan.
The other type is carried out through a debt management program. In this scenario, an account will be created to keep track of all the balances owed to current creditors. Prior to beginning repayment, a credit counseling agency will negotiate with creditors to reduce interest rates and settle on manageable monthly payments. Once these are set, all payments are totaled and this amount is withdrawn from a client’s personal bank account as one single monthly payment. The debt management company will then pay all creditors listed on the account. In simple terms, a client will be consolidating multiple payments to creditors into one low monthly payment to be disbursed to creditors through this service.

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Mike Lee
11/21/2017 03:03:25 pm

Community Credit Repair specializes in collection removal, collection deletion, charge off removal, bankruptcy removal, late payment removal, repossession removal, foreclosure removal, tax lien removal, judgment removal, and dispute code removal. These are permanent deletions from your credit report.
Community Credit Repair will work with your creditors to lower your interest rates on your current credit cards to help pay off the debt faster, or we can settle the debt for much less than you owe.
Community Credit Repair will work with your delinquent student loan lender and have all of your late payments removed under the rehabilitation program.
Community Credit Repair offers credit coaching and budgeting techniques to help you re establish your credit faster and get you on track for long lasting financial changes.
Community Credit Repair fixes bad credit and low credit scores.
Call us today for a free consultation at 888-580-2879

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  • Home
  • Contact
  • Services
    • Student Loan Options
    • Judgment Removal
    • Tax Lien Removal
    • Charge Off Removal
    • Collection Deletion
    • Credit Deletion
    • Opt Out Pre Screen
    • Chexsystems
    • Dispute Code Removal
    • Late Payment Removal
  • DEBT VALIDATION
    • Fair Credit Billing Act
    • Medical Debt
    • Student Loan Debt
    • F D C P A
    • Mortgage Debt
    • Installment Debt
    • Debt Options
    • The Fair and Accurate Credit Transactions Act
    • Fair Credit Reporting Act
  • Credit Repair
    • Time Lines
    • How Are Late Payments Affecting Your Score
    • Credit Score >
      • The Major Credit Reporting Agencies
    • Collection account removal
    • Clean Up Your Credit Report
    • How Long Do Items Stay On Your Credit Report
    • Ways to Improve Your Credit Score
    • Dispute Credit Report Error
    • How to Fix Your Credit
    • How to Remove Collection Accounts From Your Credit Reports
    • how to fix errors on credit reports
    • Eviction on your credit report
    • Credit Inquiry
    • Your credit report account mix
  • Make a Change
  • Credit Tips
  • Credit Coach
  • Fraudulent Credit Accounts
  • Negative Info Stays On Credit Reports
  • Debt Settlement Companies
  • Credit Score Boost
  • Establishing Good Credit Habits
  • Getting Your First Credit Card
  • HOW IMPORTANT IS A CREDIT CARD
  • How Many Credit Cards Should You Have
  • FAQS
    • Faqs2
  • National Lenders
  • Credit Card Companies
  • Free
  • How credit repair works