What is the disadvantage of consolidating debt
There are also several consolidation options available from the federal government for those with student loans.
In addition, with multiple payments debtors often rack up a substantial amount of interest when they are unable to pay off each individual debt – whereas with a debt consolidation loan there is just one easy payment, so interest rates will likely be reduced each month.
With a debt consolidation loan, you can pay off all of your credit cards at the same time and reduce the high interest you pay on credit card debt: debt consolidation loan interest rates tend to be lower than credit card rates, so you save money and pay off your debts faster.
The problem with these advertising spots is that they only talk about the benefits. When you consolidate your debt, you are taking multiple payments and putting them into one. Along with this, you no longer have to decide who should get paid first and how much you should send each creditor.2. How much money are you paying out in interest every month?
Unfortunately, this has tricked many people into consolidation when it was not the best decision for them. If you have a lot of debt, spread across several loans and/or credit cards, you may be paying hundreds or maybe even thousands in finance charges.
Debt consolidation means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones.