Many people think that debt consolidation is their best pay off option. This is because debt consolidation offers various kinds of advantages. It lowers the number of debts that you 
have and the interest rate on your debts. Unlike debt settlement it does not hurt your credit score as you are not required to miss the payments. However, very few understand the cons that are involved with debt consolidation. There are in fact various types of cons involved and you need to know those too before you consolidate debt.
The pros and cons you should know
The pros and cons which are involved with debt consolidation are:
1.Pros: It lowers the interest rate – With debt consolidation the interest rate on your debt lowers. Thus it becomes really easy for you to make the payments.
Con: The interest rate can increase depending on the way you are going to consolidate debt. For example, if you do balance transfer in order to consolidate your debts, you will have to transfer the balance to a 0% offer card. Though this new credit card offers 0% interest on balance transfer, this offer is only for a limited period. After the offer period ends the interest rate is going to rise and it can get high enough to create problems for you.
2.Pros: It makes debt manageable – Debt consolidation groups together all of the debts that you have and thus the number of debts lowers to only one. You will be required to make only one payment each month against this consolidated debt of yours. Thus managing debts becomes easy.
Con – Debt management becomes manageable but the situation can again get out of hand if you continue to charge purchases your credit cards gain. Moreover, you can consolidate only your unsecured debts like credit cards, payday loans, and medical bills and so on. The secured debts like car loan, mortgage, etc cannot be included in debt consolidation.
3.Pros: You can save money – Through debt consolidation, you may be able to save money as the interest rate lowers and the monthly payment gets reduced too. So, people believe that it is always true that you will be able to save money if you consolidate debt.
Con: Though it is true that the interest rate lowers, if you take a long time to pay off the consolidated debt you will not be able to save much money. Instead you will end up paying more on the interest. This is the case with most of the people as the majority of those people who opt for debt consolidation are having problems with the finances and have low cash flow. Thus, it is quite obvious that these people will opt for longer payment periods.
Last but not the least, it is said the debt consolidation improves your credit score but you should know that it can also lower your credit score if you close down accounts. If you close accounts, the credit limit lowers and credit usage higher. Thus, your credit is hurt.