3 myths about debt consolidation loans
If you’re considering the use of a debt consolidation loan, here are 3 myths you should be aware of…
It will reduce your debt: Consolidation doesn’t mean reduction. A debt consolidation will put all of your debt in one place, under one payment. If you’re wanting to reduce your debt without having to pay all of it, you’re probably thinking about a debt settlement. That’s a process will probably do a lot of damage to your credit score, so I would think long and hard before you go down that road.
It will help you save on interest: You probably won’t actually pay less when it’s all said and done, but a debt consolidation loan can give you a more manageable payment, which can make your life a little easier month to month.
It will hurt your credit score: While your credit score will more than likely take a hit in the beginning, a debt consolidation loan will allow you to pay down your total debt and do it on time each month, and that should help your credit score recover fairly quickly.
