Debt could be responsible for the collapse of a small business. Even though it is quite common for a small business to take out loans for buying assets, if you are seeing that your assets are not producing adequate income for keeping up the pace with your loan repayments, it is essential to chalk out a stratagem for making your debt far more manageable. Debt consolidation and debt settlement are the two relevant and effective processes that should be working for you. You need to evaluate each one of them to identify the most suitable option for your business and debt scenario. Let us assess the various reasons why your debt consolidation or debt settlement would be the right choice for you. Here are some of the plus points of the two debt mitigating methods.

Debt Consolidation Advantages

Debt consolidation involves taking out a single new loan from one lender and combining all the existing loans into one single loan for paying off all your debts including the credit card repayments. You would stop making numerous payments every month to different lenders. Instead, you opt for making a single payment to your new lender. You would be requesting your new lender to examine your credit score and accordingly find out exactly how much loan amount you could avail or are qualified for.

For instance, if presently you seem to owe around $30,000 in terms of credit card debt and also there is an outstanding mortgage of almost & $ 100,000, the debt consolidation lender would be counting the total outstanding amount that you may get against your own creditworthiness.  Browse through to learn more about perfect debt solutions.

Debt Settlement Advantages

Debt settlement is all about negotiating with the relevant creditors for forgiving a part of your borrowed sum or what you owe. Credit card companies would be doing this for successfully collecting outstanding debt. They could lose the entire loan amount in case the borrower opts for bankruptcy.  You could be negotiating for reduction of almost 30 percent up to 70 percent of all your outstanding debts. The percentages that are offered tend to go up sometimes when creditors can foresee that they would have to go ahead and declare bankruptcy or let the debt remain unpaid as you are not able to make the relevant payments.

Debt settlement would be involving a lot of negotiation. You may, at first, receive low offers like only 20 percent of your total debt would be forgiven by the creditor. You may point out that you simply would not be in a position to stay on top of the required payments every month at that level. You may request and go on negotiating for 70 percent of your total debt. If you go on requesting and negotiating with your creditors they would genuinely believe and appreciate the fact that you are presently encountering real financial problems.


Debt could be a huge burden and you could feel paralyzed under its negative impact. You must learn about various options available to you so that you could restore your financial stability in just a few years. You must take into account your genuine financial status and objectives for the future.

Author Bio:

Maria Stevens is a finance writer and an active blogger. She has written on numerous financial topics and also has recently come up with a blog post about managing your debt better, and deal with monthly installments pretty well. She recommends to learn more about perfect debt solutions.

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