Debt is certainly nothing out of the ordinary and being someone who lives and breathes personal finance, one question I often get from friends and family is should I consolidate all my credit card balances, car hummingbird loans tribal loans online, and any other debts, into a single consolidation loan?

The advice I always give in response is that consolidation can be a good idea, but two critical factors must be considered first.

Important (crucial) Considerations for Consolidating

1. The new loan must be at a lower rate than your existing debts.

This may seem to some as a given, but it's not always the case. Some lenders, especially the strip mall-type places that specialize in this type of thing, charge exorbitantly high rates. They will usually never mention the rate at all to you, only quoting a monthly payment instead.

For people with cash flow problems, this arrangement seems attractive, as they are cutting their monthly cash outlays, but be very wary. They are doing this by simply giving you a loan with a very long repayment term and/or a balloon payment owing at the end (which they will be happy to refinance into a new hummingbird loans payday loan indian tribe for you!).

I would consider this to be a last resort option, when everywhere else has turned you down and you can't afford to feed yourself.

In other cases, the rate on your new loan may be reasonable but still could be higher than your current debt, such as those with low rate car loans, for example. You should also see if you can get a better rate elsewhere, maybe with promotional credit card offers.

Aside from credit card offers, the best place to get a consolidation loan with a decent rate is usually your current bank.

2. Realistic Self Assessment.

You must look at yourself and your own situation and ask how and why you got into debt in the first place. If you got there because of factors beyond your control or if you have made some mistakes and are sure you have learned from them, then consolidation is probably a good idea.

Looking At the Bigger Picture and Staying Disciplined

If you gaze inward, though, and feel that there is a chance that consolidation and lower monthly debt payments will simply allow you to continue accumulating new debt, then you should reconsider.

I've known far too many people who just ride the consolidation train all the way down the tracks, usually right into bankruptcy. They get a consolidation loan, putting all their credit cards to zero and then slowly start charging things to them again and end up in the same situation before long.

If you suspect this could happen to you, then you might want to look at more severe actions, such as cutting up all your credit cards and just paying them down as fast as possible.

Closing Tips

My last piece of advice on consolidation loans is that ideally, you should try to keep making the same monthly payments, or close to it, on the loan that you were on your old debts.

Set up the hummingbird loans no credit check tribal installment loans with a longer amortization, but make sure the lender allows extra payments to be made. You can likely even set it up so that an extra amount is added to every payment, but that the extra part can be stopped if you have tight cash one month here and there.

Remember Your Goal

The goal of a consolidation loan should be reduced interest cost, allowing you to get out of debt faster. Lower monthly payments may be a necessary evil to keep you afloat, but do try to keep the payment as high as you can handle.