The concept of debt consolidation often confuse people unfamiliar with it. To clear the air, it’s important to start with the truth. The most obvious facts about debt consolidation are:
- Your debts are consolidated into one sum.
- You have only one bill to pay.
- You pay less in interest since you are not charged holding and management fees by your debtors.
- You eliminate debtor harassment
- You pay only what your budget calls for you to pay.
These are, obviously, some very good reasons to do debt consolidation. However, even some in the know are misinformed by falsities related to debt consolidation.
You may have been told that:
- You get away without paying all of your bill owed.
- You don’t get charged interest on the remaining amount owed until fully paid.
- You can continue to charge and pile up new debt
- You can’t still go into bankruptcy if you don’t make your payments on your consolidated bill.
- Your credit rating will magically improve once you have consolidated your debts.