Pros and cons of debt consolidation
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Debt consolidation loan
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Pros and Cons of Debt Consolidation: Is It the Right Choice for You?
Debt consolidation is worth considering if you are drowning in debt and all the interest you're paying isn't helping.
However, debt consolidation only works when you have a plan in place to ensure its success, and when you can avoid the common pitfalls that come with taking out another loan to pay off existing bills.
Key Takeaways
- Debt consolidation takes place when consumers use a new loan to pay off all their existing bills.
- This new loan is typically a personal installment loan with a fixed interest rate, fixed monthly payment, and a set repayment plan.
- While personal loan details vary, many come with competitive fixed interest rates, flexible repayment terms, and no hidden fees.
Pros of Debt Consolidation
Debt consolidation has the potential to help consumers in numerous ways, from shortening their repayment terms to making the process more affordable.
The following advantages can apply when people use a debt consolidation loan with a specific purpose in mind and have what it takes to
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