The words debt consolidation is one that is commonly used these days.
In spite of being a common term, some people are not sure what the phrase in fact means.
Simply put, debt consolidation is when numerous bits and pieces of debt are lumped into the one payment .
What is the point of this you may think. What is the use of having several debts and combining then into the one single debt. Debt must be debt whether it is only the single debt or many many people may think.
Some people may wonder what the benefits of debt consolidation are, and also wonder why they have always been lead to believe that it is a good idea.
The benefits of organizing debt consolidation are unbelievable and save a great deal of money as well as tidying up the financial out goings of people in debt.
When someone takes out too many different bits and pieces of debt, finances can easily spin totally out of control without much warning when a person takes out one credit card after the other without taking into account how much the total payment will come to every month.
When someone decides to carry out debt consolidation, it is obviously a fact that the total debt still exists but in the place of several different dates on which credit cards and personal loans must be made there is only the one payment in the place of many payments.
Remortgages and secured loans taken out for the purpose of debt consolidation give unbelievable savings.
Personal loans can usually have high rates of interest of seldom under 14% or so and credit cards are charged at from a minimum of usually 20% to over 40%. This all makes debt consolidation seem very desirable and in fact it is.
Secured loans at the moment have interest rates of around 9% and remortgage rates commence at 1.84% and therefore debt consolidation is much more than just combining a number of different debts into one large mountain of debt as debt consolidation really does solve debt problems.