Is debt consolidation the solution to your problem with debt? The answer is either “Yes” or “No”. It all depends on your situation. If you want to figure out whether debt consolidation is a suitable choice for you, then you have to understand the pros and cons.
Debt Consolidation Pros
- It has lower interest rates. Consolidating your high-interest credit card loans or installment loans into a single lower interest rate will help in saving you money.
- It’s convenient. Consolidating your loans into a single monthly payment is an easier and more convenient way to pay your debt.
- It reduces your monthly payments. If you’re struggling to pay your debts monthly, then consolidating your debts will help you reduce the number of payments you have to make each month.
Debt Consolidation Cons
- It will not resolve your debt. Consolidating your debt may help reduce your payments but it will not erase it.
- It could cost more. If it takes a long time for you to pay your debt, you’ll end up paying more in interest.