Consolidating multiple loan balances to achieve a smaller monthly payment or even lower interest rate makes sense on paper. However, we rarely live our lives according to the best laid plans outlined between the margins of our notebook paper. Ideally, you merge the smaller balances into one larger loan and then use the extra room in your monthly budget to breathe, pay off the larger loan, or – more than likely – dig yourself deeper into debt.
Let’s consider the cons to consolidating loan balances.
Instead of opting for the momentary “quick fix”, pursue a solution that involves paying off debt and developing sound fiscal habits that will lead to long term success.