subject: Disadvantages of Debt Consolidation [print this page] Consolidate your debt can be seen as the quickest way to fix its financial problems, but in fact can sometimes be digging in a financial mess even worse. Advertising on debt consolidation promises not only reduce interest rates but to lower their monthly payments by almost 50%, but surely this is to attract customers. Here are some of the disadvantages of consolidation programs.
1. It should be up to date on all your debts, most consolidation programs require you current on all payments. If you are behind in several installments in any of your accounts can be difficult to enter the program.
2. Administrative charges for entering the program: consolidation companies will charge for their services, this money could be used to repay debt.
4. Affects the credit score. your credit score will be affected by joining a consolidation program.
5. Timely payments: If you get to delay in payment of a monthly payment may be dropped from the program.
6. It does not help to eliminate the debt, the reality is that most people do not complete the entire program because they do not see this eliminating their debt. Lower interest rates mean lower interest monthly, but reduced the amount paid monthly longer it will take to pay the entire loan. In essence, the amount you pay each month goes to pay interest and not to pay the debt. Many individuals are more indebted than before entering the program because all they have managed to join the program is to extend its debt for a longer period of time.
The only truth to eliminate debt is to change your spending habits. Debt consolidation can be a solution in theory to financial problems, but unfortunately does not help individuals to strengthen their financial habits, they become a temporary solution to a problem much bigger.
Finally if you are in financial trouble and are considering a consolidation among other options, is a sign that you should seek professional advice, an expert who can help organize a plan to achieve economic independence as its special case.
