Please enable Cookies on your browser and try again.Myth: Debt consolidation saves interest, and there’s one smaller payment.
Truth: Debt consolidation is dangerous because it only treats the symptom.
Debt consolidation is nothing more than a con because you think you're starting with a clean slate.
Getting out of debt isn’t quick or easy, but it’s the first step to achieving lasting financial health. It simply means you’re taking out one loan to pay off a bunch of loans—or consolidating the debt to one payment.
It’s typically considered for people who have high consumer debt.
But, in almost every case, the lower payment exists because the term gets extended, not because the debt is less.
So if you stay in debt longer, you get a lower payment, but then you pay the lender more.
Debt settlement isn’t without pitfalls and consequences — and it isn’t for everyone.
Debt settlement is, simply put, hiring a debt settlement company to help negotiate lower payoffs on personal loans, collections, and open accounts like credit cards.
Debt settlement should only be used by those that already have very poor credit.
If not, your credit standing and your credit score will be severely damaged for quite a while.
Sometimes these companies misleadingly advertise their services as a way to consolidate debt — or “debt consolidation,” — but make no bones about it, this is not a When you hire a debt settlement company you are hiring them to negotiate with your lenders on your behalf.