Many people consider doing loan consolidation because it allows them to lock in the loans at a lower interest rate and gives them a set payment. It is important to consider how much lower the interest rate is and whether or not it is a permanent rate before you take this step. If it is this may be a good option as long as you stop using your credit cards and change your habits so you do not continue to run up debt.
It is important that you never consider loan consolidation where you take unsecured debt such as credit cards and signature loans and move it to secured debt. Someone who does this may take out a home equity loan or a second mortgage to pay off the credit cards. This puts the home at risk if they are unable to pay those bills for any reason.
Loan consolidation does not address the problems that got you into debt into the first place. It is important to address those problems and stick to a budget in order to change your financial situation.
– DENNIS MWANGI
You can consolidate your credit cards, your car loans or signature loans. You will just need to take out a larger loan and use that money to pay off your other debts.
