Consolidating debts pros cons
Myth: Debt consolidation saves interest, and there’s one smaller payment.
Truth: Debt consolidation is dangerous because it only treats the symptom.
So if you want to look at the pluses and minuses of debt consolidation for your personal situation, you might want to start by considering your monthly cash flow — and ask yourself the following questions: Pro #1 — When you opt for debt consolidation, you have only one creditor to pay, and that company will call your creditors and negotiate on your behalf.You can’t borrow your way out of debt in the same way you can’t get out of a hole by digging out the bottom.Getting out of debt isn’t quick or easy, but it’s the first step to achieving lasting financial health. It simply means you’re taking out one loan to pay off a bunch of loans—or consolidating the debt to one payment.It’s typically considered for people who have high consumer debt.But most of the time, after someone consolidates their debt, the debt grows back. They still don’t have a game plan to pay cash and spend less.