Is debt consolidation good or just another debt creator
Debt Management | February 20, 2010 at 1:41 amMany people are confused about the nature of debt consolidation as they aren’t much aware about the term. Debt consolidation is essentially a method to merge all you debts and make one payment instead of many. However, in most of the cases, the monthly payment is reduced.
People are generally reluctant to make use of debt management service because they keep bother about a common question: ‘Is debt consolidation good or just another debt building machine?’ However, the answer to this question varies for every individual depending on the company and type of service he chooses. But let’s be generic and try to solve this mystery.
First, a debtor needs to understand what debt consolidation is and how it is helpful for him. Usually, the interest rate is lower than what he previously used to pay. And hence, he pays a lesser aggregate amount. So, the answer to the question: ‘Is debt management good?’ is a probable yes.
Debt consolidation is also useful as it provides emotional stability. People buried under debts are always worried about ways to repays them. Moreover, the creditor calls for collections are frustrating. Hence, having just one creditor solves this problem.
However, debt consolidation provides them a false feeling of freedom. People who usually clear their debts through debt consolidation services are often becomes careless and switch back to their old spending habits. Instead of being frugal and saving more to repay the consolidation loans, he borrows more to spend more. And the cycle starts again. They acquire many credit cards, go for a vacation, purchase another vehicle, and party more, which keeps them sinking deep in the debt hole. Hence, is debt consolidation good? Not if the debtor becomes careless.
So the answer to this question purely depends on how one looks at things. And it definitely cannot be answered by asking the debt consolidation agent. It is an opportunity for him to earn commission. Hence, his answer would always be positive. He would suggest you to go for a debt consolidation plan that provides him highest commission.
Perhaps, the best way to find an answer to the question: ‘is debt management good?’ is by discussing it with friends and relatives who have used this service. Then, do your calculations and determine the actual amount you will end up paying. If it seems to be a viable option for long term, you can probably go for it. However, you must remember, it’s not a quick fix to get rid of your debts.
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I feel its a debt creator. Easy loans for people having bad credit history is a path of creating more debts in their life! ultimately being a bankrupt
100% debt creator. Giving money who have no ability to repay means what? creating more debts!
This program is not a debt creator. This program can be very helpful for people who cannot manage their debt properly.
I cannot be sure about this program. It may be useful and not. All depends how you make your outcome.