The answer is a firm yes and no. In order to determine if debt consolidation can really help you, you have to arm yourself with facts and commit to making it work for long term. Debt consolidation is not a quick fix. It can however, be a second chance at getting back on the road to financial health.

Debt consolidation

So, with that in mind, why do you want to consolidate your debt? if it’s just to have fewer checks to write, that may not be a valid reason. But, if you’re like many people today, the economy has taken a serious toll on your monthly budget. Ask yourself the following questions before considering debt consolidation. Is consolidating my debt going to truly take a burden off my monthly budget, allowing me to purchase necessities, as well as, have money for emergencies? Am I going to use this option to make and put into practice, better spending habits and positive financial decisions? If you have honestly answered yes to both questions, then debt consolidation can really help you.

Credit card debt is one of the main reasons people begin to drown in monthly debt. Credit card companies are eager to offer lines of credit, even to those with poor or no credit. Your reasons for accepting the cards at the time may have been valid but, once you start to use them you become dependent on them. The revolving, merry-go-round, debt (being able to use instantly, the money you just paid) becomes almost impossible to get out of.

One day you wake up and realize that what started out as one, three thousand dollar card, has turned into seven varying maxed out limits. Your debt has climbed to ten, fifteen, or twenty thousand dollars. Now you have several payments of different amounts, due to various interest rates and amounts owed. A consolidation loan can corral all the payments into one. The singular payment is usually lower than all the other payments combined with a lower interest rate.

The amount of time you take to pay back the loan will affect the amount of interest you pay in the long run. Make a real effort to put extra on the principal of the loan every month. Even if you wind up taking the loan to full term, the definite payoff date shines a bright light on a once very dark tunnel.

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