If you are like most of us you've probably noticed the huge increase in the number of debt consolidation loan advertisements on the television. While watching the ads, you can get the mistaken belief that these companies are interested in helping you and have your best interest at heart. It's critical that you understand the difference between advertisement marketing and something that will truly benefit you and your situation.
Just because these ads promise to make things better for you doesn't mean that they actually will. The ads are focused on what they believe are your emotional buttons that can draw you in to their offer. These emotional buttons may include:
1. Lowering your monthly payments
2. Giving you extra money at the end of the month to spend on yourself, a vacation, or other reward
Understand that these may be benefits, but are not reasons by themselves to contact the lender. Giving yourself a reward simply doesn't make sense, because you're still deeply in debt. While it's true that your monthly payment outgo may be lowered, the number of months or years that you're required to pay will definitely go up. Paying even more interest, even for lower payments for a much longer period of time may not be the best approach to handle your bills.
A bill consolidation loan however can make a lot of sense if you're committed to lowering the total debt or amount you owe. This means that you need to take drastic action to lower the amount of debt that you are carrying. It's possible to use a consolidation loan to lower your overall monthly payments. The key to a successful debt consolidation loan strategy however is what you do with the extra money that's no longer going to the bills.
If you follow the television advertisements and go on vacation or simply spend it, you end up worse off with the consolidation loan. Instead, if you take the extra money and make larger than minimum payments on the consolidation loan itself, you will not only get out of debt much faster but pay substantially less interest on the loan.
This is really the best of both worlds. Should an emergency arise and you need the extra cash, the minimum payment is still an option. The majority of months you will be able to pay a much larger payment. The good news is that the extra over and above the minimum payment will go directly to your debt, paying it off that much faster.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
I have heard several stories about people getting ...
By: Rhonda | 18-08-2008
I have heard several stories about people getting carts full of groceries for just pennies or even getting money back! How do they do it? My family is on a very tight budget and any advice will help. Thank you.
Sawbuck
By: Dave Glenda Wood | 18-08-2008
if a fin is 5.00, and a c note is 100.00 dollars, how much is a sawbuck?
What is the best way to consolidate my unsecured ...
By: Jan Yocum | 18-08-2008
what is the best way to consolidate my unsecured debt
Inflation is eating my savings!
By: hernan | 18-08-2008
My bank is giving me 3.5% for a Money Market account. Inflation is around 6% annual. I AM LOOSING MONEY!! Where can I put my money that is safe and I don't loose with inflation?
If a bank goes belly-up and you have to accounts ...
By: dollardan4 | 18-08-2008
if a bank goes belly-up and you have to accounts for 100,000.each,does fdic cover each one ?
Im interested in getting a business loan. I am a ...
By: Marybeth | 17-08-2008
Im interested in getting a business loan. I am a women and I am diabetic. I thought that instead of my diabetics working against me it could work for me. Not sure where to look and need help. Thanks
Q&A Powered by:
Latest Finance Articles
Understanding Debt Consolidation Loans
By: Richard Greenwood | 07/10/2008
It can be all too easy to end up in debt and especially during the current times of financial uncertainty you may find yourself unable to make repayments. Consolidating your debt can make your debts easier to manage and lower your interest charges meaning you become debt free faster.
Credit Card Comparison
By: Richard Greenwood | 07/10/2008
Credit card offers are everywhere and all claim to out do each other. How do you cut through the marketing talk and understand the key features you need to compare to make an informed decision. Find out with this informative article on credit card comparison.
Shopping For Auto Insurance
By: Brenda Williams | 07/10/2008
When you get your license for the first time before you begin driving you need to get car insurance as it's mandatory to have car insurance while driving. Car insurance can be rather expensive, especially for new drivers which is why you'll need to ensure that you're getting the best...
Taking 100% Responsibility - the Prerequisite for Creating Money & Marriage Success
By: Leslie Cunningham | 07/10/2008
It's a simple concept, to refrain from blaming and complaining, and yet it's a challenge to change a habit, especially one that everyone else has. Like sticking to your diet, when everyone else around you is enjoying chocolate cake. Keep reading and you'll find out how this relates to your marriage and finances. Then I'll share some action steps to help you become 100% responsible for your life.
Retirement Income Investing and Your Portfolio
By: Steve Selengut | 07/10/2008
Brokerage firm monthly statements are designed to promote either fear or greed, depending on the current market environment. Nowhere on your statement can you find numbers that report your net investment, your total working capital, or your true asset allocation. Current and projected income numbers are given little attention
Buy to Let Investors Get a Boost
By: Parmdeep Vadesha | 06/10/2008
Buy to let UK investors are in a prime position to take advantage of a new government plan to spur property market activity. The scheme aims to permit property buyers to buy properties worth up to
How to Buy a Repossessed Property for Below Market Value
By: Parmdeep Vadesha | 06/10/2008
Buying a repossessed property is what matters for investors who are keen on reaping high profits. But even with the advantages it poses, there are certain aspects you need to be aware of before you start on the task of acquiring your next property cheaply.
Brits Should Ensure They Have the Cheapest Energy Supplier
By: Abbi Rouse | 06/10/2008
With energy prices escalating steadily, consumers could knock considerable amounts off their utility bills by switching from their areas default supplier.
More from Abigail Franks
Anxiety Treatment Options
By: Abigail Franks | 13/08/2007 | Health
It should be reasonable to assume that finding a generalized anxiety treatment would take some research and careful consideration. There is no simple answer to any mental condition and anxiety is particularly difficult to treat.
Do You Want To Find Cheap College Textbooks And Save Big Bucks?
By: Abigail Franks | 27/06/2007 | Education
A cheaper college textbook is an especially good deal for the local bookstore as the profit margins are very healthy. Not that you should really care about how much they make on your purchases. Still , if they were as concerned about your education as they claim, wouldn't...
Is There Really A Good Home Cure For Head Lice?
By: Abigail Franks | 23/06/2007 | Medicine
If you need a home cure for head louse, don't worry. Getting rid of an infestation of head parasites may be a nuisance but it's not difficult if you use the right treatment. With the ever growing number of head lice infections, there has been a lot of...
Getting the Best Price.- are Half Priced Sales Better Than Discounted Collete Textbooks
By: Abigail Franks | 20/06/2007 | Education
Of all the services provided by your college administration, the buying and selling a discount used college textbook along with other resources materials are the most profitable for them. This is because the discount is usually offered direct from the publisher so it's not a burden to pass it along to the students.
Treating Toenail Fungus Is Easy With The Right Cure
By: Abigail Franks | 18/06/2007 | Medicine
Finding the right method of treating toenail fungus that works for you may take some effort but is definitely worth it to get rid of the toe fungus. While you may have fought or are fighting this condition now, if you're reading this, the lack of a complete cure...
Tips To Potty Train Your Puppy
By: Abigail Franks | 18/06/2007 | Pets
The idea of potty training a puppy may seem more than a little daunting with all the information available today. Fact is though that it's not hard if you have the right tools and methods. Below are a few tips that will start you on this adventure of...
A Toenail Fungus Treatment From The Internet!
By: Abigail Franks | 10/06/2007 | Medicine
Looking for a toenail fungus treatment is typically started by disappointment in different treatment ideas. Fighting this problem is a long term effort and many have feelings of annoyance due to a lack of effective remedies.
The problem is the very nature of this condition. Once you have it,...
House Training a Puppy - Easy Tips
By: Abigail Franks | 09/06/2007 | Pets
So you have a new pet and are starting to think about how you plan to successfully accomplish dog house training, well good for you! Dog house breaking is critical if you want to have a pet that will be happy and contented. Most dogs prefer to be with their human (that's you) and will not be very happy living outdoors.
Finance 
