What is Debt Consolidation? This debt elimination process requires you to consolidate your debts into one debt so that you have one monthly payment instead of multiple monthly payments. Ideally, that loan is at a lower interest rate or longer term so that your monthly payment is reduced.
Although the payment is lower than your current payment on the credit cards, you would end up paying just about the same as if you used the Snowball Strategy. The difference is that it would take you 5 times as long to repay the debt.
You can't borrow your way out of debt. This is a form of manipulation and not debt elimination; unfortunately, this tactic tricks you into believing that you've paid somebody off. In reality, you've just moved the debt from one place to another FOR A COST. All you did was change the name of your creditor and paid to do it. This cost is included in your new loan, so you are now deeper in debt.
In addition, your loan is more than likely secured against something like your car or home, which means you will lose them if you have trouble paying.
In conclusion, this is just the illusion of a debt elimination plan. Why deceive yourself, risk losing your home or vehicle and prolong your agony? AVOID DEBT CONSOLIDATION AT ALL COSTS unless you have a specific plan to accelerate the payoff of this loan and minimize your risk. This is not your Best-Debt-Elimination-Plan.
Looking for debt relief? Check out Curadebt.
What does the Bible have to say about debt?
Learn the 5 Phrases that Destroy Financial Health to help you change your way of thinking!
Do you ever wonder why you can't save any money? So do many Americans - find out why you're having so much trouble.
Discover why cash is king!
Ever wonder what the dangers of debt actually are? Learn more about why your debt is so poisonous.
Want to learn how to understand your credit? Start here!
Need help understanding the different debt help programs? Find out more about your options for debt relief.