What is a Debt Consolidation Loan?
Debt Consolidation Loans allow you to pay off all of your debts in exchange for a single monthly payment to your bank or credit provider at a lower interest rate. Debt Consolidation Loans might seem attractive at first, but they can seriously affect you in the long run.
Why It Is So Bad For You
Debt Consolidation Loans are effectively a “con” because they create the misconception that your are doing something proactive about your debt problems. At the end of the day, the debt is still there, as are the habits that caused it – all you’ve really done is grouped your debt together. Remember, you can’t borrow your way out of debt. If you were stuck in a hole in the ground, would you dig your way out of it? No, you wouldn’t. Debt Consolidation Loans are not the answer for your debt problem. But don’t worry, there is still hope!
What Are Your Alternatives?
The National Credit Act formally introduced Debt Counselling to assist over-indebted consumers like yourself by developing a repayment plan, which is affordable to you as well as acceptable to all your Credit Providers.