It's Your Money: Debt Consolidation

At first glance, debt consolidation looks like a great quick fix for people who owe a lot of money.

They get their outstanding bills bundled into one, making it easier to pay... often with a lower monthly payment.

"Debt consolidation can allow someone to pay all of their bills on time by reducing the amount of cash flow to bills, even though, in the long run, it'll usually mean repaying more debt, it still may help a family avoid numerous problems in the short run," says UW Extension Financial Specialist Michael Gutter.

But, Gutter is quick to point out the long-term repercussions of consolidation loans. He mentioned that you usually end up paying more money; lower monthly payments, but for a longer period of time. What's more, the only way debt consolidation will get you out of debt is if you stop buying on credit while you pay off the balance.

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