Don’t be fooled into thinking that debt consolidation is right for everybody.Before you make a final decision, consider the pros and cons detailed above and speak with a financial counselor with the heart of a teacher to see if debt consolidation is right for your situation.
For one thing, you need to be able to qualify for the new credit that is cheaper than at least some of your existing debts, which may not be easy if you are already struggling to pay what you owe.
If you get serious about paying off your debt, then you can probably get the ball rolling quickly enough to pay off the some of the smaller debts first without consolidating your debt.
Two pieces of folk wisdom help frame the debate over debt consolidation: “Many hands make light work.” “Put all your problems in one place — it’s easier to keep an eye on them.” The first suggests that a burden of debt is easier to shoulder when divided into smaller pieces.
Debt consolidation involves using a new source of credit to pay off multiple existing debts.
Benefits can include making your payments easier to keep track of, lowering your interest rate, lowering your monthly payments and lowering your long-term interest expense.