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Irrespective of the economic scenario, everyone gets trapped into debt at some point in their lives. It could be a house that you bought or a car you always wanted, once you borrow money you have to pay it back with interest. It sometimes happens that the vicious circle of debt keeps going and one day people realize [link widoczny dla zalogowanych] that they have borrowed more than can pay. A steady income keeps repayments on track but on the occasion of losing a job or getting a pay cut, repayments seem even more cumbersome. Debt consolidation loans have [link widoczny dla zalogowanych] come to help thousands lead a debt free life but caused problems for others.

It is [link widoczny dla zalogowanych] important to explore the pros and cons of debt consolidation loans before choosing one as its implications can be many.

The advantages of a debt consolidation loan:

1. The number of payments: One of the biggest advantages of a debt consolidation loan is that there is just one loan to pay off. There is no hassle of remembering the number of loans you have to pay off, their due dates and their interest rates. It is all combined in one that makes it so simple.

2. Lower rates of interest: In most cases the debt consolidation loan demands a rate of interest that is much lower than the interest being paid on the various loans taken. This means that you have to shell out much less every month in the form of interest payments and it will result in quite a [link widoczny dla zalogowanych] large sum over a period of [link widoczny dla zalogowanych] time.

3. Single creditor: Since all your loans are combined to form a single [link widoczny dla zalogowanych] one, you have only [link widoczny dla zalogowanych] there will no more annoying calls from creditors or any threatening letters to [link widoczny dla zalogowanych] worry about. A single creditor also means a definite amount to pay back, a specified time period and only one due date to remember.
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4. Tax breaks: Some forms of debt consolidation loans offer tax breaks. For instance credit card dues don’t help you at [link widoczny dla zalogowanych] all but mortgages give you tax breaks.

The [link widoczny dla zalogowanych] disadvantages of a debt consolidation loan:

1. Further debt: By taking a debt consolidation loan you are combining all the payments and not getting relieved from them all together. This debt consolidation loan may become one big loan that is again difficult to pay off and you may be pushed deeper in debt.

2. Bad credit scores: If you are not able to pay off the debt consolidation loan you will get a bad credit [link widoczny dla zalogowanych] score. There is just one payment to make every month and if you miss it, you have to face the brunt of bad credit scores.

3. Risks: Like always there are risks involved. There can be unqualified people giving advice that would land you in trouble. There are [link widoczny dla zalogowanych] counterfeits and scams that are rampant and you may be a victim of one of them. Also with secured loans you always have the [link widoczny dla zalogowanych] risk of losing property if you don’t pay back well in time.