Debt Consolidation

Debt consolidation is a process by which a debtor obtains a loan from a banking or financial institution in order to repay his debts.

 Advantages

• Allows a debtor to avoid insolvency and maintain a good credit rating;
• Only one monthly payment is required.

Disadvantages

• The loan payment must be made each month without exception;
• There is no possibility of making a smaller, minimum payment (like credit cards);
• The monthly payment may not be based on your budget situation.