CNK Nepal
Nepalese meeting the blog networks
What is the difference between debt reduction and a debt consolidation loan?
May 27th, 2008 by admin
Far too often many folks get these two confused. A debt consolidation loan is usually a secured loan against something of great value, usually your home, used to pay off unsecured debts. While debt reduction is actually the abiltity to reduce ones debt, not merely transform it. Essentially what you are doing with a debt consolidation loan is transforming your lower risk unsecured debt into much higher risk secured debt. Usually when people refer to debt reduction they are referring to debt settlement. A method of negotiating debts down to pay a lower amount back, hence a debt reduction. The risky aspect of a secured debt consolidation loan is that if you default on the loan you will lose the security, again usually your home.
