Debt Consolidation

Debt consolidation is a tricky subject. While it seems like it's a solution to save on interest and create one smaller payment, it actually is quite dangerous as it only treats the symptom. While debt consolidation creates the sensation that you've actually done something about your debt, it's actually still there! You've only just moved it. Getting rid of debt in a real way is actually not quick or easy. Debt can also be viewed as symptomatic, debt represents one's misuse of money and budget, it means you've been overspending – with all the good excuses that you want.

A statistic to keep in mind when considering debt consolidation is that in 78% of the cases debt grows back, the person who was once in debt find him or herself in the same situation again because he or she didn't go to the root of the problem and change spending habits. At first debt consolidation seems appealing because of its low interest rate, but the truth is that the longer you stay in debt the more you pay the lender - this is why debt consolidation businesses exist and are successful.