The number one reason people take out loans is, funnily enough, to pay off other loans.
But is debt consolidation a smart idea? For credit card holders, probably not.
Bundling various loans into a single lump sum might sound appealing at first: Instead of paying 20 creditors, you pay one rate — typically lower — once a month. The problem is the issues that got you into debt in the first place can also keep you there. Much like an extension a college paper, having more time to do the assignment might mean you’ll simply put it off.
Check out this infographic from Lendio.com, a loan consultant company, for more facts:
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