You Have Choices for Consolidating Your Debt

Basically, it comes down to two choices when it comes to debt consolidation. You can either choose to borrow the debt-counselingcash needed to consolidate your debts or you can seek the additional services of a credit counseling or debt consolidation service. The scenario you choose should not be made in haste. Since every individual financial situation is different, selecting the right choice for your debts is instrumental in living a debt-free, financially-secured life.

The following is a breakdown of the various pros and cons for consolidating debts using one of the aforementioned methods:

Borrowing Cash
When you want to borrow cash to pay off your outstanding debts, you will first have to have impeccable credit in order to qualify for a loan from a bank or other financial institution. Chances are good that if you have mounting debts you are already unable to pay, borrowing money from a bank may not be possible. You can also choose to borrow cash from family or friends if you have that resource available to you but entering into that territory can spell out all kind of trouble and personal issues.

The Pros of Borrowing for Consolidation

  • You can eliminate your debts in essentially one action
  • You can immediately stop all debt collection actions by paying debts in full
  • Your credit rating will remain intact and potentially improve in a faster period of time

The Cons of Borrowing for Consolidation

  • You will need excellent credit to qualify for a loan
  • You can risk losing collateral if you fail to meet payment agreements on the loan
  • You may become overconfident in your financial situation, leading to more bad money habits
  • You can become even more in debt

Using Services for Debt Consolidation
When you take the debt consolidation or credit counseling route for getting out of debt, you must carefully consider which company’s methods will work best for you. This can be a time-intensive process to find the right plan and it will take considerable effort on your part to get the ball rolling.  Credit counseling and debt consolidation companies are becoming commonplace and not all companies are working on legitimate grounds.

The Pros of Debt Consolidation Services

  • You can reduce your monthly payments dramatically, allowing for more savings flexibility
  • You can eliminate harassing calls from debt collectors once enrolled in a consolidation plan
  • You can stop accumulating fees and interest charges from accruing
  • You can re-learn how to manage your income in a more efficient manner

The Cons of Debt Consolidation Services

You may not qualify to receive assistance from certain consolidation programs

  • You will likely have to close out your credit card and other accounts once you are working under a plan
  • You can only enroll unsecured debt into the consolidation program
  • Your credit report may suffer the repercussions of using a debt consolidation program

There is no right or wrong way to consolidate your debts. The decision is yours to make. The best thing you can do for yourself is be prepared and knowledgeable about whatever path you choose. Working to pay off your debts is key to financial security in the future but will only be successful when you make the right financial choices for you.


  1. don smith says:

    Having a slick budget and watching what you spend would help alot of places out this year for sure.

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