This is part 1 of a multi part series on Debt Consolidation. We hope some of your questions about debt consolidation will be answered within this series, and you can get some idea of how to best approach your individual situation.

If you are swimming in debt, debt consolidation can sound like the answer to your prayers. But debt consolidation may not be able to offer everything you are hoping for. The flashy ads that are seen on television and that come in the mailbox every day promise that it’s quick, it can lower your interest rates, and cut your debt in half. However, there are a few things that people in debt need to remember before they get caught up in the idea of someone magically taking their debt away for a very low cost.

The Loan
Debt consolidation loans are not easy to obtain, regardless of what the advertisements tell you. If you need this type of loan, it’s probably because you are already in debt and your credit history is probably already scarred.

If you are a credit risk, the consolidator may try to sell you on a loan that’s easy to get but will charge you with interest rates as high as 21% or 22%. This could be much higher than the interest rates you are currently paying on your debt. Though the loan may promise low, low monthly payments in the end, you’re going to end up paying more.