Debt consolidation is when you take several debts and get a loan to pay them off, therefore, providing you with one monthly payment instead of multiple payments
Why It's Important
I will probably do an article soon on debt consolidation and credit card balance transfers since they kind of fall under the same boat.
The premise is that you are just restructuring your debt (moving it around) instead of paying it off. If you have a bigger balance outstanding, then more than likely your interest payments will be, therefore, keeping you in debt longer than if you just paid them off individually.
Additionally, they may restructure your debt to a longer term, thus, reducing your payments, so you think you are getting a deal. In reality, you are just signing up to be in debt longer.
Don't play around with debt, just get rid of it!
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