Consolidating debt a
When companies advertises that they can "save you money," what they are usually referring to is simply a reduction in your total monthly payments -- not a savings in the cost of paying off your debt in full.
By consolidating your payments into a single loan, you might be paying one monthly payment that is smaller than the sum of the other monthly payments, but if they stretch out your term for a longer period of time you could actually end up paying more interest.
As you can imagine, this helpful service is not free.
In addition to principal and interest payments, there are fees, and these can eat you alive if you have less-than-perfect credit.
There are a lot of companies looking to help you stay afloat, so be sure to compare them side-by-side and point-by-point.
Obviously, if you keep incurring late fees and penalties as you scurry to make ends meet every month, you need a better plan.
By consolidating your many obligations into a single one, you can often lower your interest rate and end up with a lower monthly payment.
Many people find managing a single payment easier than juggling several different bills month after month.
In some cases it might make sense to negotiate debt settlement on some specific debts before considering a broader debt consolidation program.
It's no secret that most people who are awash in debt typically have poor credit, so high rates and fees may do them in slowly.
But there are pitfalls and drawbacks to simplifying your finances this way.