Thinking about a Personal Loan for Debt Consolidation? You May Want to Think Again
Contributed by Stephanie Litaker
Why a personal loan for debt consolidation may not be the answer you thought it was
You feel like you drowning in debt, and you're looking for a way out - then you see the advertisements about debt consolidation through a personal loan. It sounds pretty good, you get a personal loan and pay off your credit card debt. But if you think this is the magic solution to your problems, it really isn't. Sorry to disappoint you.
When you think about making one payment versus several payments, it may be hard to see why that isn't a good answer. But the truth of the matter is that it is a bad idea, unless of course you're willing to learn from you mistakes and turn over a new leaf in the spending department.
How to really achieve debt consolidation
When you take out a personal loan for debt consolidation purposes, you are really just robbing Peter to pay Paul. Taking out a personal loan to pay off your debts is not the magic cure you've been hoping for, instead it's just a way to pay off your debt in the short term, but you create more debt in the long term. Remember those really beautiful diamond earrings that you thought you had to have? That really awesome personal MP3 player you absolutely had to have?
And how about that adorable pair of jeans that would go just perfectly with that really hot pair of shoes you saw? Yeah, those are all of the things that got you into the financial trouble that you're in now, and unless you figure out how to stop spending money like it grows in the backyard, you'll never get out of debt. Even with debt consolidation.
