Pros cons consolidating your debt
With just one debt payment every month and one fixed interest rate, you might be able to pay off your loans on a shorter timeline.That’s mostly because credit cards don’t have a set repayment period.Personal loans will carry the biggest benefit if you’re currently paying high interest rates on multiple credit card accounts. Even a small change in your interest rate can make a big difference, especially if you have a lot of credit card debt.Keep in mind that there’s no guarantee your interest rate will be lower on a personal loan. Moving debt from multiple credit cards to one credit card consolidation loan can simplify your debt payoff.
Although there could be benefits to taking out a personal loan to pay off credit cards, it also carries inherent risks.Although the lower monthly instalment may give you short term breathing space, it will keep you paying interest for up to twenty years.• It can lead to more debt.Debt consolidation can cause the illusion that debt is being paid off. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward –- and free. " Debt consolidation is a strategy to roll multiple old debts into a single new one. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. We're on your side, even if it means we don't make a cent.