The definition of debt consolidation is simple. In the most basic terms, it is taking out a loan in order to pay off several creditors.

This may seem like it is defeating the purpose of paying off your creditors since you will still have a loan to pay off, but there are distinct advantages to debt consolidation:

#1 - One green trust cash direct lender installment loans uk is easier to manage. Let's say you have three credit cards and an unsecured personal loan that you are paying every month. The payment on credit card #1 is due on the 5th of the month. The payment on the second card is due on the 15th of the month. The third card payment is due on the 21st, and the personal loan bill has a due date of the 29th. This is a common scenario. If you take a closer look, you have a payment due each week of the month and these payments are draining your wallet. When you get a consolidation loan to pay these bills off, your new loan comes with a single payment that allows you to budget better.

#2 - The payment on one loan is significantly less than the sum of the others. Keeping this same scenario in mind, let's assume you minimum payments are $200/month on your personal green trust cash indian reservation cash loans, $175 on the first credit card, $128 on your second card, and $315 on your third. In this case you would be paying a total of $818/month in minimum payments. With a debt consolidation loan, you could pay these debts and have one loan payment with a payment that is significantly less. It is not uncommon for consolidation loans to reduce your monthly debt payments by half or more.

#3 - Debt consolidation gives you and end date. When you are making minimum payments on multiple loans, you are not reducing the principal of these loans. Instead, you are just buying yourself more time to pay on it while it never gets paid off. In this scenario, it is very common to pay more in interest than your original principal amount. Debt consolidation green trust cash online application for american tribe loans come with specific monthly payments over a specific period of time - usually 12 to 48 months. At the end of the loan term, your debts are paid off. You have a clear mission and you can see the light at the end of the tunnel.

#4 - You pay less over time. With debt consolidation and its clear end date, you know exactly how much you will be paying in principal and exactly how much you will be paying interest. You also know how long you will be paying on your loan and when you will be debt free. On the other hand, when you make minimum payments on loans and credit card balances, you end up paying much more in the long run because the end never comes. You could pay interest for decades on relatively small principal balances.

So just because the definition of debt consolidation may seem like "robbing Peter to pay Paul", it really is a very good solution to help you become debt free. Many debt consolidation loans can eliminate your debts in months instead of decades. Don't let the definition scare you. Keep an open mind to this viable option. It could give your wallet a break and your credit score a boost.

Ken S., Founder LowRateSearch © 2010

The definition of debt consolidation may seem scary since it is taking out a loan to pay off other loans, but debt consolidation can be a very simple and easy solution. Don't let the sheer definition scare you out of weighing your options. Learn if you can lower your monthly payments with a low interest debt consolidation loan now. Finding out is free. Visit LowRateSearch for more.