These days, coming out from the misery circle of obligations are the basic concern of almost every citizen of the United States.
The last fiscal year of 2009 was very bad both from economic as well as personal point of view.
A large number people lost their jobs due to which unemployment level in the country increased.
Since people are jobless, they are facing the problem of limited funds.
This scarcity of funds is making people unable to pay back the amount of their installments on regular basis.
Majority of people file for bankruptcy when they face the problem of minimum funds but this option holds many negative aspects.
That is why; it is not famous in both the lenders as well as the borrower's community.
These days, the process of debt consolidation and credit counseling are getting very much popular.
Both these processes are legal and are run under the full legislation and rules of the federal government.
Usually, it has been seen that people experience confusion when it comes to the selection of any of these methods.
The given piece of writing will for sure help people in understanding the process of debt consolidation and credit counseling in more clear aspect.
Debt consolidation: In the process of debt consolidation, a person takes one big loan from the bank or any other financial institution.
This big loan is issued to the person so that he can pay back the amount of all the gathered liabilities.
The consolidated loan is basically a short term loan and it is issued at lesser rate of interest.
The Best thing about the consolidation deal is that a person gets loan at low interest rate.
With the help of this process, a person gets relief from all the accumulated debt in time frame of 4 to 5 years.
Credit counseling: In this process, the financial experts of the fiscal institutes tell the person about the accurate use of the credit card.
In fact, it is not wrong to say that these experts are basically telling the person that how to use credit cards in such a decent way that can protect them from future financial disturbance.
Both these methods are good at their respective places but, debt consolidation makes more financial sense.