What You Should Know About Debt Consolidation


Debt consolidation is a process that many want to turn to when they are faced with overwhelming debt. But what is it anyway and how does it help? It is a process where you take out one loan to pay off others, in other words, you are consolidating the debt into one payment.

The reason debt consolidation is appealing is because there is often a lower interest rate on certain parts of the debt and the payment is usually lower. You have to watch out here, though, because the term may have been extended which is the reason for the lower payments. As a consequence, you end up paying the lender more in the long run. Even though you have lower interest rates, the longer payment period may cause the amount you pay in interest to be higher.

Another problem with debt consolidation is that this still does not provide a game plan for the debtor and often, the debt grows back. Even with this process, they will need to work on building healthy money habits and developing a plan to stay out of debt.

So to summarize, let us take a look at the advantages and disadvantages of debt consolidation.


  • Interest rates should be lower
  • Monthly payments should be lower
  • You have more time to pay off your debt
  • Fewer monthly payments


  • Your pay off date will be further out
  • You may end up paying more in the long run
  • Debt consolidation services can be costly and some are scams

With debt consolidation, although it helps for the short term, it may be dangerous in the future. If you need assistance paying off debt and want to get away from creditors, discuss your specific case with our Memphis bankruptcy attorney at the Law Office of Stephen R. Leffler, P.C.! We can help with all of your debt needs and provide you with honest answers.