Consolidating debt bad
These processes are often confused, but they’re very different.
Here’s how: Federal student loan consolidation basics How to consolidate federal student loans Student loan refinancing basics Compare student loan refinance lenders When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.
But if you do not end up paying off your debt during the introductory 6-12 month period, you will usually be charged interest retroactively on the entire balance that you transferred – including whatever portion you had already paid off! what if you’re not sure you can pay off your debt in the next 6-12 months and you don’t have a mortgage (or don’t want to use your house as collateral)?As mentioned above, a debt consolidation loan can help you get out of debt if: Please see our blog post titled Is Debt Consolidation a Good Idea?for more information that might help you with your decision.And since debt consolidation is one option that many people with debt are curious about, today we’d like to tackle this question: How does debt consolidation work?The purpose of debt consolidation is to allow people who are having trouble managing various debts to consolidate, or group, all their debts into one.