Debt Consolidation Without the Surprises

Along with life, the universe, and everything else, just about everything has its good sides and its bad sides. The same holds true for debt consolidation loans. You will want to consider some facts before you embark on that financial voyageDebt ConsolidationSuccinctly, a debt consolidation loan is a financial instrument whereby you roll as much of your other debt as you deem prudent into one single account. Thereby you have just one payment a month -- period.Financial duties become rather strenuous regarding keeping track and regarding cash flow when a bunch of little bills are constantly demanding attention. Credit cards, car loans, or other purchases made on credit, can get annoying. Also, they all tend to have different, and pretty high, interest rates.Debt consolidation loans are usually larger, normally have a lower interest rate, and take longer to pay off. They are similar to mortgage payments. If you have a lot of little bills, debt consolidation could be a good option for you.Good Side of Debt ConsolidationInstead of having a loan here and another payment there, and another that you seem to forget, you can wrap all these pesky little guys into one package.So, instead of two or a dozen creditors, you have one payment, with one lender, at one interest rate, with one maturity date. And a substantial decrease in postage and stationery or time spent on bill-paying websites.If all those bills are a hassle to cover every month, then stay within your budget with one monthly payment which will probably be much lower than the aggregate of the bills you struggle with each month.Not So Good Side of Debt ConsolidationThe time for the maturity, or the last payment on your consolidation loan, is usually a lot longer than any of your smaller payments. So, unless you watch it, you could end up paying more in the long run.Be careful. When you approach a consolidation lender, you can be sure that they are going to play on your anxiety. They want you take out the largest possible loan with the highest interest rates they can get. Do not let them prey upon your weaknesses.Do not sign anything you do not understand. Go with your gut. Always remember, you are the boss. The lender is not doing you a favor, your are doing them a favor by bringing them your business. Ask for clear explanations about terms, fees, interest rates, everything. Make sure that an early payoff does not carry heavy fees.Keep These Thing In MindDebt consolidation companies must make a problem as does any other business. Make sure that the pay off time on your loan is too long a time to accommodate your lifestyle. Perhaps you are at a point where you do not really a debt consolidation loan, you just might need to cut down on your spending.Since consolidation loans carry a larger balance than your smaller loans, you need to be very careful with any fine print. If you sign up for a high-interest loan spread out over a long time, you could end up paying a lot more than you would have originally. Check the numbers carefully to be sure they add up for you and your financial circumstance.Do not be hasty. Waiting a day or two to be sure you are doing the right thing will not hurt anybody except maybe a lender who wants you to sign your life away quickly. Especially if you are feeling a little weak because of a poor credit history, take a day to think about it. Lenders like to put the pressure on low credit folks by making them feel like they are doing them a favor. You are the boss, you decide. You are doing them a favor by giving them your business.