Consolidating all your loans into one when you’re up to your neck in debt can be a good thing. However unless you change your spending habits, it may be a short term remedy only. With credit so readily available, borrowing money through personal loans and credit cards has never been easier. But it’s not so easy when the time arrives for the monthly repayments, particularly if you're 'debt-heavy'.
As a result, some mortgage brokers and lenders have been promoting the virtues of " debt consolidation". Under this strategy you consolidate all your outstanding, higher-interest debts into one loan with a lower interest rate. It can reduce your immediate monthly debt obligations by hundreds of dollars. Ideally debts are consolidated into your mortgages because home loan rates are mostly the lowest available and homes provide the lender with more security.
If you are not a home owner or do not have enough equity in your home, it might be possible to consolidate your debts into a personal loan. However – this strategy will only work if you break the spending habits that drove you into debt in the first place. While altering habits involves budgeting better and spending less, shredding the plastic cards is also essential! It's true debt consolidation leaves you with a "nil balance" against your cards. But this doesn’t mean the plastic nasties can’t be used again. If unexpected bills hit the mailbox there’s nothing stopping consumers whacking payment on the card. If you don't commit to disciplined spending habits, debt consolidation won't help and may leave you poorer by thousands of dollars.
I am writing to express my appreciation for all your great help with sorting my finances out. I was going to lose everything I had worked so hard for so long. Thank you Guys !
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