The Pros and Cons of Debt Consolidation Loans in Layman’s Terms

Just about anyone burdened by a large number of open debt accounts has probably considered a debt consolidation loan. On top of making everything simpler, it would also free up more of your finances every single month.

While this is all fine & dandy, there are some negatives that go along with debt consolidation loans and it is important that you understand what they are.

After all, once you sign the contract you are committed to the new deal. And it wouldn’t be very good to commit to something that you’re not really clear on whether it would benefit your situation or not.

Pros of Debt Consolidation

The most sought after feature of any debt consolidation loan is the left over money that you will have with a single combined bill. They can lower the payment for you because you are going from a bunch of tiny accounts to one single combined payment account. With that account, you’ll have much more money left over when all is said and done each month.

A single payment means that you have less bills to keep track of. With that one single payment you are much more apt to make your payments on time than you would have been for all of those multiple payments. In this way debt consolidation will simplify your life quite a bit and you won’t have to worry about missing any of those bills each month, because now all you’ll do is be concerned with one affordable convenient monthly payment.

You credit has probably already taken a hit due to delinquent payments.  But with timely payments on the new loan, this will begin to gradually improve your credit score. This is your second chance – don’t blow it!

Cons of Debt Consolidation

While it probably sounds pretty great to have more money left over every month, there is another side to consider with this setup and it would be helpful to look into the cost that you have to pay for these lower payments. After all, the debt consolidation business is not doing this just to be good samaritans; they’re also in it to make money. And they can’t possibly charge you less than what they spend to get you out of debt.

While lowering the monthly payment may be a way for a debt company to help you out, it is also a way for them to make more money. Since the amount you pay in interest accumulates more over the time that it takes you to pay off your new loan, you’re actually paying more by making those lower payments. The prolonged payments and interest rate helps increase the gap between the amount it takes for them to service your debt and what you ultimately end up paying.


Debt consolidation is a double-edged sword that should only be used if necessary and you have an income to agree to the revised payment structure. Sure you will be given more freedom and less burden to pay off your debts, but you’ll also be paying on that loan for much longer than you originally planned. So keep this in mind when considering getting a debt consolidation loan. For some it’s a great move, for others not so much.

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When it comes to money, I’d rather not risk anything. If this is a double-edged sword, then I’d stay away from it. It does seem to sound good for anyone who is in dire straits though.

Jerome Siacor

Debt consolidation loans must be approached with extreme caution. First and foremost, know that it’s a financial instrument – even with its seemingly ‘Good Samaritan’ approach of rescuing the debtor from the clutches of many creditors. Though you may look at the lesser interest as an advantage, you also get a longer time to pay, which is logical as the business that seem to put some weight off your shoulder has to earn from the debt consolidation. More often than not, these type of loans are secured loans, giving you greater headache in the long run. The way to go about this is pretty straightforward: Think twice before you leap – do the math!

Oz Watson

I think a debt consolidation loan it’s not a double-edged sword since it can be a very useful single-edged sword (saying it metaphorically) when debts just get out of control. I would recommend using this service only if it’s really necessary for you to pay your debts. Debt consolidation might be very helpful in those hard times, we just have to make sure that we know how to use it properly.

Andrea Aguba

I agree with this post. I’ve been thinking about getting a loan, but this post made me weigh things, whether I should go for it or not. It scares me thinking about all the bills you have to pay monthly and if it’s do-able or not. In our world today, it’s impossible to not get a loan, but if ever you do, I guess a debt consolidation is the right thing to do.


Debt consolidation seems great for getting a lower interest rate. If it’s about getting the same interest rates but with one payment option that could help your credit if you have too many accounts revolving. So it’s always good to look into on a case by case basis.


I don’t know but the word ‘debt’ in itself is scary enough. Why pay to have your debts paid when you can pay it directly? Complete with a contract at that, it is scary to me.


I agree with what this post is all about. It is our responsibility as a maker of loan to pay our debts no matter how big or small our debt is. This debt consolidation loan may help us on paying our debts. This is a great article. Very useful and interesting.

Kariz Chavez

I find this article, short as it may be, very helpful. I’ve been thinking about consolidating my debts for almost a month now and this made me realize that I shouldn’t be in any form of debt to begin with. Debt consolidation only leads you to yet another bigger door of a whole lot more future debts!!! Glad that I’m not into something deep just yet! I’d have to re-think buying that new car, I guess.

ahmad shahir

this debt consolidation are very useful for people who always lose track of their payment in the first place. you can use one account or multiple account to pay.

Katie Coon

I have been thinking about debt consolidation for some time now and it can honestly make life easier. The trade off of paying one smaller bill for a longer period of time can make paying the bills every month less of a struggle! Less bills to keep track of can be a huge weight off my shoulders. I will now think more seriously about debt consolidation!

Veronica M

I firmly agree with the content of this post. When committing to a debt consolidation loan, your struggle with debt is not solved, nor are the underlying habits that may have contributed to put you in your current financial situation. That being said, debt consolidation loans are not a solution, but rather prolonging your endeavor.


I couldn’t agree more with the conclusion of this article. Personally, I don’t think you should go down the path of debt in the first place, I mean, sure, we all tap out once in a while and would need a loan life line but before stepping in to these things it is very important to evaluate, analyze, and consider the factors and whether or not you can pay these off and how these help you in the long run.

Dennis Montealegre

Paying off debt is the first step toward a healthy financial life. A debt consolidation loan may help you take that step, just like it helped me, Great article, really puts into perspective the pros as of why people should consider consolidating their debt.

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