Debt Consolidation is Just Part of Your Financial Solution
By: Charles Essmeier | Posted: 27th March 2007
The promises of debt consolidation are tantalizing; a consolidation loan will let you replace all of your existing debts with a single loan. You can pay only one bill that pays for all of your outstanding debt. You can even save money if you obtain a reduced interest rate. Debt consolidation seems like a win-win situation, and wouldn't anyone want to participate in that? You won't have to worry about multiple deadlines each month.
At first glance, debt consolidation does seem like the perfect solution to the problem of too many bills and not enough money. Consolidating debt is only part of the solution to the problem of having too much debt. If you ignore the rest of the solution, you may not benefit, and you might even wind up worse off than before.
Based on the substantial advertising for debt consolidation loans, a lot of individuals with financial troubles might suppose that obtaining a loan that lowers your payments is all that is necessary to obtain financial independence. Smart consumers know there is much more to achieving financial freedom than simply getting another loan.
For a lot of consumers, the problem of owing too much money is one of too little restraint and a lack of financial training. Repairing financial problems by paying back the debt is not going to help an individual who compulsively spends more money than they have, nor is it going to help an individual who doesn't understand late fees or how interest compounds.
Getting the consumer out of trouble is good, but keeping the consumer out of trouble in the future should be the main objective. A credit counselor can look over the individual's financial history for clues as to how the debtor got into trouble in the first place. An experienced credit counselor can fully assess an individual's finances. A counselor can see how to best help the debtor learn to deal with the main problem, which is one of careless spending.
Credit counseling organizations may be able to offer access to loans, but their main function should be to teach. The credit counselor can help the debtor learn where he went wrong, explain the situation in language that the debtor understands, and offer solutions as to how the problem can be avoided in the future. Getting out of debt trouble is an admirable objective, but the big picture involves staying free of financial burdens.
©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing , a firm devoted to affiliate marketing, and YouEndDebt.com, a site that covers credit cards and debt consolidation, identity theft and other financial matters.
About the Author
Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to
debt consolidation, credit counseling, payday loans and personal bankruptcy and HomeEquityHelp.net, a site devoted to mortgages and
home equity loans.
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