Increasing debts are a problem for the western world today
with most of the economy strapped on credit. With people’s financing reaching
high amounts, many turn to debt consolidation for help. However, will it
actually guarantee you a better debt-free future?
Debt consolidation
could work for you if you want to take all your repayments and summarize them
into one payment amount you need to pay regularly. This helps you stay
organised and constantly address your debt. You would not even have to organise
the highest to lowest interest rate loan.
You also get a lower interest rate because the entire debt
is lumped together. This helps you get more for your personal and utility
budget. This ensures that you could have an easy way out of debt.
However, it might not work for you because to lower some of
your interest rates, you might need to use a home equity loan or other
collateral. You may end up losing your home or other properties if you
consolidate your loan.
Debt consolidation also does not guarantee that you will end
your debt with a good credit score. Some debt consolidation companies use your
monthly repayments to help in their negotiations with your creditors regarding
the lower settlement on your account.
