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Is consolidating your debts a good idea for you?
As the name suggests ‘consolidating debt’ allows you to merge all your various debts into one single loan charged at one rate.
It can make a lot of sense to do this if, for instance, you have built up debts on store cards or credit cards where the interest rate is likely to be much higher than that charged for a personal loan.
By cutting the interest rate substantially you will dramatically reduce the amount of interest you will have to pay in total and you should be able to pay off your debt more quickly. Of course consolidating your debts makes life easier as you only have one payment to make each month.
One thing to watch out for though is the tempatation to run up more debts on the cards you have just cleared!
October 27, 2008 at 10:40 am | personal loan | No comment
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