Debt Consolidation vs Debt Counselling
Both debt consolidation and debt counselling can be used to help you get out of debt. But they do so in very different ways, and the best solution for you will depend largely on how deep in debt you are and what options are available to you.
Debt consolidation works by pulling all your debt (credit cards accounts, store accounts, personal loans, and payday loans) into a single loan. Usually this debt consolidation loan will have a longer loan term, which brings monthly installments down, making them more affordable.
This a good option if you are struggling to make minimum payments and just want a little breathing room. But it requires you to have a credit score still good enough to qualify you for a debt consolidation loan.
If you are seriously deep in debt and have been missing payments for some time already, your credit score might already be too low to qualify you for a debt consolidation loan. In this case, debt counselling may be your only option.