Debt consolidation loans vs. debt management programs: Here's how to choose

Debt consolidation loans and debt management programs are two popular debt relief options. And, while these options may sound similar, they're very different from one another. Debt consolidation loans are typically personal loans. If you take this route, you'll use your new loan to pay off and consolidate high interest debts. If the new loan's interest rate is lower than the average interest rate on your current debts, you'll save money in the process.

And, whether or not you're struggling financially should play a role in your decision to choose a debt consolidation loan or debt management program. So, ask yourself, 'Can I comfortably afford my minimum payments?' If the answer is 'no,' a debt consolidation loan may not provide enough relief. Instead, consider a debt management program as the negotiators may be able to use your financial hardship details to significantly reduce your monthly payment obligations.

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