At a glance on various debt cleaning programmes usually used in UK, we can see several interesting things. Debt counselling agencies always direct the debtors, trailing with heaps of liabilities to follow any of the various debt settling programmes. Two major methods, which are largely used are debt consolidation and debt management. Basically, these concepts are distinct in theirs nature and application. In a usual debate on debt consolidation versus debt management, we can see two fractions of people in support of each methods.

How do they differ?

Basically, both options are aimed at tackling the liabilities of a debtor. But, they work in different ways, as the former one converge all your debts into a single loan, the latter one helps in managing debts in a systematic way. While speaking on debt consolidation versus debt management, a short note is necessary to narrate both the concepts in a better way.

It is the process of consolidating all the debts in to a single loan with reduced APR. Under this process, all the unsecured debts (generally) and payments of a borrower can be consolidated into a single loan. After that, the borrower will only have to repay a single instalment instead the many he had to repay in the past. As an advantage, the interest rates and repayment instalments of debt consolidation loans will be a lower amount in comparison to the past dues.

Thus with debt consolidation, borrower have to pay to single lender instead of many with reduced interest rates. However when you go for a consolidation loan, it will extend your repayment period and thus you have to pay more at last.

In debt management, a third party takes part as a mediator, who will suggest the debtor a framework so as to settle down the debts in a better way. Often, they will negotiate with the several creditors of a borrower to lower the APR, repayment instalments, service charges, late fees etc..

More than that, they concentrate the debtor on money management. Moreover, the debt management agency will provide all the instructions needed for the future financial security of the debtors. The debt management service may also continue as a perfect partner of the debtor until all his/her debts will be eliminated in the future.

The only disastrous thing that could happen with a debt management plan is the refusal of your lenders and credit card companies to freeze your interest rates. In that case your debt steadily increases as you also have to pay the fee to debt management company.

After all, a question which programme is the best one to tackle debts is natural. In debt consolidation versus debt management, it is wonderful to see that both of them do have equal capacity to heal the debt wounds of a debtor. Anyway these two most popular methods are considered to be the best means to tackle debts instead going ahead to face a CCJ, IVA or bankruptcy. So, if you are in a debt crisis make an intelligible decision regarding the debt solution. Don't run to embrace bankruptcy or anything dangerous like that. Try as far as possible to solve the problems with any of the above methods.