Should I Consolidate My Debt Or Am I Better Off As I Am?

Online, May 17, 2011 (Newswire.com) - During these hard economic times, most consumers are pinching their pennies and stretching their budgets as far as possible. But sometimes, it's just not enough.

Sometimes, despite best efforts, consumers wind up using credit or unsecured personal loans to pay for everyday expenses or to pay the bills. This kind of debt can pile up quickly. Once you've piled up debt in this manner, but haven't increased your income or decreased your bills, what do you do?

For many, the answer is debt consolidation. This is, simply put, taking out a loan to pay off other debts, a process that allows you to consolidate the money you owe into one payment.
But what are the pros and cons of debt consolidation? Each side has its argument.

A debt consolidation loan can be helpful if you have a number of high interest loans, since you could use the consolidation to roll the high interest debt into a lower interest and more manageable payment. If you can make your payments more easily, you can avoid late fees, extra charges and bad marks on your credit report.

The flip side is that debt consolidation may not be the right choice for some because it can be difficult to find fair interest rates. And if the rate on your consolidation loan isn't any better than the unsecured loan on your current debt, what's the point?

It can also take a longer amount of time to pay off your debt when you consolidate.

So the bottom line is this: whether you consolidate your loans into one payment depends on your current situation. If you need to get your debt paid off quickly, you may want to leave things as they are. But if you have a little time, a debt consolidation loan may be just the ticket you're looking for.

Weigh your options carefully before you decide.