What are the pros and cons of debt consolidation?


Nick Bendel
Jun 15, 2017( 1 min read )

In some instances, debt consolidation can help borrowers reduce their repayments or simplify them. For example, someone might take out a $7,000 personal loan at an interest rate of 8 per cent so they can repay a (different) $4,000 personal loan at 10 per cent and a $3,000 credit card loan at 15 per cent.

However, debt consolidation can backfire if the borrower spends the extra money instead of using it to repay the new loan.


Related FAQs

Debt consolidation is the process of rolling several old debts into one new debt – usually to save money or for the sake of convenience.

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