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What is the difference between debt consolidation and debt review?
Debt consolidation promises one thing but delivers another. Here’s why you should skip debt consolidation and opt instead to follow a debt review plan that helps you actually get rid of debt fast.
| Debt Consolidation | Debt Review |
| One of the prerequisites to qualify for the loan is having a good credit score | Credit scores are not required to qualify for debt review |
| Consolidates all your debts into one, with the need to take out one bigger loan | Consolidates all your debts into one, without the need to take out one bigger loan |
| Lower monthly installment | Lower monthly installment |
| Household expenses are usually not covered | All household expenses are covered. The repayment plan prioritizes covering all household expenses and the balance is channeled towards paying your debt |
| Debt consolidation doesn’t mean debt elimination | The fact that you cannot borrow while under debt review means that you are eliminating debt when you pay your debt. |
| Makes sense when the interest rate that you pay for the consolidation loan is lower than you were paying before. | Interest rates are lowered and the amount of debt decreases |
| There is no legal protection of assets since there is no court order in place. If its a secured debt consolidation loan against your home you can lose your home if you miss repayments. | Your assets are legally protected while under debt review in the form of a court order or consent order |
| The bigger loan granted to pay off the smaller loans is limited | The amount of debt included under debt review is unlimited |
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