Three Debt Consolidation Moves Not to Make

The words "debt consolidation" has a good ring to them, especially for those people who live in expensive cities like Los Angeles.  However, with all good things there are usually some downsides or just a few things you want to keep in mind so you are able to refrain from making a bad debt situation worse.  Debt consolidation is an excellent move to make; you just want to ensure that you do it in a manner that is not going to cost you more in the long run.

First and foremost, it's important to keep in mind that there is nobody who can roll all your debt into one little package and magically make it a lot lower or cheaper.  They may be able to reduce it, but it's not like you're going to go from owing $20,000 to $200 or anything.  Just remember that there are debt consolidation scams out there so don't fall for all of their antics. So, here are three moves to avoid when considering debt consolidation.

• The Hard-Money Loan: The name of this one just sounds intimidating, which is probably why many people fall for it.  If you are in need of a debt consolidation loan, don't fall for one that is going to have insanely high interest.  Many of these loans have interest as high as 22%.
• Debt Consolidation Companies: There are those who can help and then there are those who will really hurt you because they're just out to make a buck.  These are the companies behind the advertisements stating, "Debt Relief is Just a Click Away!" and "Slash Your Interest Rates!"  Stay away from these guys, you don't need them and they can wreak havoc on your credit.  Besides, you can handle this on your own.
• Balance Transfers: Everybody is offering low interest balance transfers these days and the bottom line is that the rates they offer only last for a specific amount of time.  After that time period ends, you have to transfer again, and then it's only a matter of time before all of this shows up on your credit card.  

All of these moves can really hurt you and make your situation worse in the long run.  Sometimes it all goes on your credit report and you end up looking like a risk when you're really trying to not be a risk and take care of your debt.  The bottom lines is that there are many options for you to handle your own debt consolidation, so don't fall for the traps that are advertised on the streets of Los Angeles.

Find more articles tagged with: