Debt Consolidation Loans Can Be Rocky Terrain

Online, April 21, 2011 (Newswire.com) - Debt consolidation is a reality for many, since it has become easy to borrow money quickly without considering the consequences of having too much debt.

Consolidation loans provide assistance for those in debt; however, not all consolidation loans are alike, and each loan offer from a company should be evaluated before you sign on the dotted line. Don't allow anxiety or embarrassment to lead you to take on a debt consolidation loan that isn't in your best interest. Here's how to choose the best debt consolidation loan for you.

Watch out for debt consolidation loans with a high number of fees. The loan may be lower in interest than others, but the fees could make it more costly in the long run. Add up all the fees on the loan, and see if it's really a good deal, when compared with a loan that's slightly higher in interest, but without the fees.

Avoid debt consolidation loans with super low payments. You may think you're getting a great deal because of the lower payment, but it may be an opportunity for the debt consolidation company to charge you interest.

You should be leery of variable interest rate debt consolidation loans. The lender will want you to think that a super low interest rate will be around for a long period of time, but in reality, anything goes with a variable rate loan. You can bet in most cases, the ink won't even be dry on your signature before the rate climbs sky-high.

If your current debt is at a fixed rate, don't gamble by trading it in for a variable rate consolidation loan. It's much better to borrow money knowing exactly what the expectations are on both sides than having to worry that it could change for the worse at any given time.