Debt Consolidation is one of the debt solutions which usually is a loan that brings together all of your unsecured debt balances. This loan can then be repaid over an extended period of time, through a single monthly payment which may be cheaper than the cost of the other debts treated individually.
In the current economic climate most banks and lending institutions have tightened their acceptance criteria and many people who would have qualified for a consolidation loan two years ago, are now struggling to obtain adequate refinance amounts to clear all of their debts into one loan, or are finding that the interest rates charged are making this option less attractive.
One problem with debt consolidation is that many people forget to destroy their credit cards after transferring the outstanding debts into the loan, thereby giving themselves further credit which is subsequently used!
As a result of this, an initial solution to the problem can become an even greater problem later for many people with debt problems.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
MISSING PAYMENTS WILL HAVE SEVERE CONSEQUENCES AND MAY MAKE OBTAINING CREDIT MORE DIFFICULT IN THE FUTURE.