What You Don't Know About Debt Consolidation Could Hurt You

Debt consolidation may seem like the easy way out, but there are many things to consider before opting to use it. Many debt reduction counselors will tell you that consolidation will help you get current with your bills and debts. However, what you don’t know about consolidating your debt can really hurt you.

Consolidation is often advised when someone is paying down credit card debt. Since these interest rates can reach 22% or higher, even an unsecured consolidation loan from a bank can save you money on interest. On a $10,000 credit balance, a consolidation loan that is a measly 6% lower than your card’s interest rate can save you $600 over the course of a year.

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