Debt consolidation basically means putting all of your debts in one place.
It's a great option for folks who've had enough and don't know what else to do.
It's a wonderful solution for some, but it's not ideal for everybody.
Here is what a debt consolidation service can do for you.
What Consolidation CAN Do The main advantage of a consolidation service is that they put all your debts in one place.
This helps keep you organized.
No more multiple payments each month to different companies.
You've got it all in one easy place, and this helps you to stay organized.
Another advantage is that a debt consolidation service will get you a lower monthly payment.
Not only do you have it all in one place, you can expect to pay a fraction of what you're paying now.
This is the main reason lots of folks consolidate.
This one advantage outweighs the disadvantages for those who are in dire straits financially.
Consolidation also establishes a plan and helps you see the light at the end of the tunnel.
Debt can seem endless, especially when it's credit card debt.
Credit card debt can be literally endless, since there is no specified end to the repayment period.
As interest stacks up, you may stop breathing before you get it all paid off! With consolidation, you'll have a definite end to the debt.
It may be years and years away, but at least it's there, offering a light at the end of the tunnel.
What Consolidation CAN'T Do It can't pay your debts for you or make your debts disappear entirely.
Too bad! If you use a debt consolidation service, you still have to make those payments on time and keep your creditors happy.
The Disadvantages Of Debt Consolidation There are just a few things to consider with consolidation.
One is that lowering the interest rate will mean extending the repayment period.
This is an important thing to think about: Is it worth it to pay off the debt over a longer period of time, but to have smaller payments? For most, it is.
Unless you are just a year or two away from debt freedom, it's usually worth it to lighten the monthly load and tack on a few more years.
The other problem is that debt consolidation service can hurt your credit rating.
For most of us in serious debt, we're not so worried about this anymore.
Anything will help! But, if you're concerned about your credit, this is something to think about.
You can always ask your debt consolidation service company beforehand if it will have any adverse effect.
Debt consolidation service is just what you need if you're eyeball deep in debt.
They can help you put it all in one place, make your payments easier and negotiate with your creditors.