The major drawback is that you will extend all of your loans to a longer period, paying more interest over that period, even though your monthly payments will probably be less than the total of the individual loans.
If you have 5 loans, each loan would have been paid off in 1 yr, 2 yrs, 3 yrs, 4 yrs and 5 yrs. Consolidate those loans into a single 5 yr loan and the 1 yr through 4 yr loans suddenly become 5 yr loans. You’ll pay more interest on those loans.
Consolidation loans are sometimes harder to obtain because the individual loans and your status with those loans may prevent you from getting a consolidation loan if you are behind on the payments.
All loans have some demerits. Not only this debt consolidation loan. Some drawbacks of debt consolidation loan are it is quite easy to fall into another debt if you are not able to manage your credit cards properly. You may end up paying more on your debts if you repay over a period of 10-30 years and you can lose your property if you are not able to repay your secured debt consolidation loan on time.
The major drawback is that you will extend all of your loans to a longer period, paying more interest over that period, even though your monthly payments will probably be less than the total of the individual loans.
If you have 5 loans, each loan would have been paid off in 1 yr, 2 yrs, 3 yrs, 4 yrs and 5 yrs. Consolidate those loans into a single 5 yr loan and the 1 yr through 4 yr loans suddenly become 5 yr loans. You’ll pay more interest on those loans.
Consolidation loans are sometimes harder to obtain because the individual loans and your status with those loans may prevent you from getting a consolidation loan if you are behind on the payments.
All loans have some demerits. Not only this debt consolidation loan. Some drawbacks of debt consolidation loan are it is quite easy to fall into another debt if you are not able to manage your credit cards properly. You may end up paying more on your debts if you repay over a period of 10-30 years and you can lose your property if you are not able to repay your secured debt consolidation loan on time.