The Pros and Cons of
Debt Consolidation
We have all seen those television and newspaper ads where "Mrs Smith saved $500 per month...", which make debt consolidation loans look too good to be true. Every case is different so it is really up to you or your credit situation to decide whether the pros and the cons of debt consolidation add up to a plausible solution for you. Below is a table illustrating some of the pros and cons of debt consolidation.
| Pros | Cons |
- Reduced interest rate.
- Lower monthly payments.
- Single monthly payment simplifies money management.
- All debts brought together with one lender.
- As long as the monthly payments are maintained, there nothing else to worry about.
|
- You will end up paying more in the long run.
- It will take you longer time to pay off your debts.
- It's easy to spend money saved from reduced payments.
- Could mean even more debt to consolidate at a later time.
- It addresses symptoms - not the causes of your debts.
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Above were just a few of the many pros and cons. As a general rule of life always remember that id a deal looks or sounds too good to be true, it just may be. This rule especially applies to debt consolidation. For some tips on what you should be aware of,
click here.
