Wondering whether debt consolidation is the right choice for you? Read the following list of debt consolidation pros and cons to make an educated decision about how to solve your debt problems.
Debt Consolidation Pros
- Will substantially reduce interest on credit cards and other unsecured debt
- Company will negotiate lower payments for you
- One easy monthly payment instead of multiple payments
- Incentive programs may be available
- Closed accounts take away the temptation to continue spending
- Will stop calls from collection agencies
- Can get you out of debt years earlier
- Will save you thousands in interest and penalties
Debt Consolidation Cons
- Fees for the service can vary widely from provider to provider
- Can only be used for unsecured debt
- You are still responsible for all debts and should check all statements
- Some creditors may not be willing to work with a debt consolidation service
- Closes most or all of your credit accounts until debts are paid or you leave the program
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