At first, the lure of borrowing small amounts of money seems innocent enough. Content in the belief that the money owed will not be a problem to pay back, and further reinforced by the initial payments towards it, we can become ever bolder, getting deeper and deeper in until we reach a point where the debt is suddenly not so easy to pay down, and just paying enough to not go further in the hole becomes a challenge. When the point is reached where our payments don't even keep us on even footing, a vicious downward spiral will begin that leads us deeper and deeper into debt with each passing day, as penalties and interest charges pile on top of each other.



Breaking free from this nasty cycle is difficult and takes many hard choices. One of the most common refrains for breaking free is to employ debt consolidation, whereby all of your debts, or at least as many as possible, are joined together. This can indeed be a great strategy, but is not without its pitfalls and perils.

Of course the simple transference of all your debts to one account does make your burden any lighter. One of a number of possible scenarios need to be place to make this venture worthwhile, besides any convenience factor it may offer.

To be of use to you, the debt consolidation must at least accomplish one of three things:

1.Decrease the total monthly payment amount

2.Lower the net amount of interest on debt, or

3.Lower the total amount of debt through debt consolidation

Which of these, if any, will occur depends entirely on the debt consolidation plan you can get put into place.

The most common result will be that your overall monthly payment is lowered, which gives you a much greater opportunity to at least make your minimum payments each month and not slide further into debt. In rare cases, two or all three of the above scenarios may take place, in which case you can surely thank your lucky stars.

The risk here is that if the monthly payments are low enough that they are not a concern, those initial problems that led to the debt in the first place could resurface. Complacency and a sense of security could lead to one to add onto that debt again until they are back in the same boat as before, but with fewer options to escape the noose this time around. While worrying over debt is not healthy, not respecting it enough is always cause for concern, and will eventually lead to that worry.

And while those lower monthly payments may seem a God-send, and probably are, they come as the result of a longer extended plan, meaning your paying more interest and money back for a longer period of time. A is certainly a valuable way to wriggle out of trouble, but it will require a longer term of commitment to stay the course.

Once that debt shrinks and becomes ever easier to pay off, it will hopefully have the effect of you wanting to continue to put pressure on it and pay it down more and more each month. As long as you don't let this opportunity slip past you, debt consolidation can be a great tool for those in financial crisis.