Is Debt Consolidation a good idea?
Debt consolidation (according to wikipedia) is taking out one loan to pay off many others. This is so that you can secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.
I had a guy friend who was doing that. When he explained it to me, I didn’t get it at first. He said he took one loan to pay off his study loan, credit card debt and I think some smaller debts.
Then when I think about it, isn’t it better to just focus on one loan? You can then settle all your debts (and avoid high interest rates) and just pay back one loan. So you can do your budgeting easily.
Of course the best way is to avoid debt in the first place but this is one solution to help your financial problems.
Debt Consolidation is really important for the future security of your personal finances.;*`