The truth is debt consolidation loans and debt settlement companies don’t help you slay mammoth amounts of debt.In fact, you end up paying more and staying in debt longer because of so-called consolidation.Even if you qualify for a loan with low interest, there’s no guarantee the rate will stay low.But let’s be honest: Your interest rate isn’t the main problem. This specifically applies to consolidating debt through credit card balance transfers.Take time to carefully consider if this type of loan is right for you.
While consolidation can be a beneficial tool to have in your arsenal, it can backfire drastically if you don’t watch your step.The enticingly low interest rate is usually an introductory promotion and applies for a certain period of time only. In almost every case, you’ll have lower payments because the term of your loan is prolonged. Your goal should be to get out of debt as fast as you can!You are only restructuring your debt, not eliminating it.Many make the mistake of using the cards again once they are paid off.If you think you may lack the discipline to pay off the loan and stay within your limits, then you might want to avoid this type of debt management.This means your "lower payment" has cost ,688 more.Two words for you: , although often the terms are used interchangeably.The credit consolidation loan calculator can help you compare your current payments against those of a new loan.Though a lump sum payment can be convenient, it may not be the best decision for your situation.They’ll leave you on the hook for late fees and additional interest payments on debt they promised to help you pay!Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission.That’s why dishonest companies that promote too-good-to-be-true debt relief programs continue to rank as the top consumer complaint received by the Federal Trade Commission.Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.Get the facts before you consolidate or work with a settlement company.