Debt Management vs. Debt Settlement - What’s the difference

Features

It’s the process of better managing one’s debts to ensure timely payment. It may involve approaching the lender for reducing interest rate and fees on loan to lower EMIs but still total loan has to be paid. Such an option is undertaken for safeguarding both interest of lender and debtor.

The borrower gets to pay a lumpsum amount which is typically less than the original loan amount.

Payment

Full loan to be repaid

Loan repaid is less than the original loan amount

Credit Score

Not impacted 

Adversely impacted

Benefit

Improvement in money management skills and draw up a budget to repay the loan at the earliest.

Borrower can repay lesser loan amount.