25th November 2019

consumercredit
15

What are the disadvantages of consolidation?

Debt consolidation companies argue that borrowing money at a low interest rate to pay off loans or credit cards at a higher interest rate can save you money, or help you pay off the debt sooner. Other advantages include having fewer payments to make each month, and less likelihood that you'll be late on payments.

Also, can debt consolidation affect your credit?

A debt consolidation loan affects your credit score in a positive way. In fact, to credit agencies, paying off several accounts with the consolidation loan makes it seem as if you have paid off accounts. The debt consolidation loan appears as a new credit account, but accounts paid in full are always positive.

Is it a good idea to consolidate your debt?

If you're hopelessly drowning in debt, know that you can't negotiate any lower interest rates with your credit card companies or creditors, or if the math works out, a debt consolidation loan may be a good decision for you. If it may be a good time to strike, pay it all off, and walk away debt-free. Photo by erules123.
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