The plain cold hard truth here is that Debt Consolidation can be dangerous because you treat only the symptom. If you have a raging balance of payments problem that would shame a third world banana republic and you haven't come to terms with this fact then Debt Consolidation is only going to provide temporary relief. Without coming to terms with the cause of how you got into the debt in the first place it is a bit like trying to effect the repair of an amputated limb with only sticking plaster and no anaesthetic - it's going to be extremely painful and have no prospect of long term success.

So what is Debt Consolidation?

Debt consolidation is when you roll all of your smaller individual loans into one large loan, usually with a longer term and a lower interest rate. Note that this does not entail or require you getting a NEW loan at a sexier interest rate and longer term etc. Debt consolidation is the process of combining many existing loans into a one single process and several smaller payments to your creditors.

What Debt Consolidation is NOT is the process by which a consumer exchanges one loan for another taking various factors in to consideration.

Debt Consolidation and Credit Counseling can help you become debt free. To do so however requires that you must understand some basic consumer credit counseling and debt consolidation credit counseling. There is also a price to pay for being able to achieve this.

What is this price?

Well to be brutally blunt your credit record is going to tank big time in the short term. Don't believe people when they promise otherwise. It isn't going to happen. Now I know this is a bit like watching a sports programme on TV when the Commentator has an outbreak of Commentators curse and the unexpected happens. In this case this is where some old and wizened debt ridden character emerges from round the corner to proudly declare that their credit rating and record has never been better.

Sorry folks but there is no such thing as a free lunch in this case. Now this should serve as a warning to people who blindly believe that any debt consolidation firm can solve their problems. With a debt consolidation program, you make just one payment per month at a reduced rate.

If you adhere to the Consolidation programme you have managed to set up and the payments go through smoothly then after a while your credit record will start to show regular payments but the initial defaults will be on your file and will show up for anything between three and six years depending on the financial jurisdiction that you live within.

This may well preclude you from taking advantage of the juicy offers in the Sunday Supplements etc but that may not be a bad thing either.