A credit card consolidation loan will help you pay off your credit cards by putting all of your payments into one lump sum. Usually, this lump sum is less than the total of all of your monthly payments combined, helping you to better budget your funds. If you pay extra each month, you can use the consolidation loan to pay down the debt faster and get rid of credit card debt for good.

On the Other: Stay Away from More Fees and Interest

Credit card consolidation loans come with a fee and usually do not pay off the loans any sooner than simply paying the minimum payment on your cards as is. Therefore, why would you pay money to pay off your debt in the same amount of time? You are better off to keep your credit cards as is and pay down as much as possible each month, as opposed to paying another fee to do pretty much the same thing.

Bottom Line

No matter which way you slice it, credit card debt is bad. The interest rates are high and borrowers can quickly get themselves in over their heads before they know it. Weigh both options and see which one is right for you. If consolidating the debt into one loan helps you budget and become more disciplined, than the fee is worth it to you. However, if you do not change your habits, you will simply have a credit card consolidation loan and more credit card debt.

Source:

BankRate.com: Debt Consolidation

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