Money Girl explains the pros and cons of using personal loans to consolidate or pay off credit card debt.You’ll find out the best places to apply for a personal loan and how consolidating affects your credit.Cape Town - Over-indebted consumers have various options to choose from to help them on their road to financial freedom, one of which is debt consolidation.In a nutshell, debt consolidation involves taking out one single loan to settle all your other loans.Debt consolidation loans are usually stretched over a long period, which means that your total interest payments add up to a very expensive debt.Paying off short term debts like credit cards and personal loans over much longer periods, even at a slightly lower rate, actually means paying a lot more interest in the long run.Interest rates work against us when we are holding bad debts, such as auto loans, credit card debt, department store debt, small business loans, and even college debt.One common step that many people take when they get serious about paying off debt is to consolidate debt into one monthly payment through a debt relief program.
Debt consolidation can cause the illusion that debt is being paid off.
Page 1 of 3About one half of all American households are carrying credit card debt, with an average balance above ,000.
If you’re one of them, you’re probably paying way too much interest for your debt than you should.
Financial independence is at the core of the American Dream.
No one sets out fresh out of college with aspirations and hopes of being dead broke at the end of their life!