Paying off debt can be easier when bills are consolidated into a single, manageable monthly payment. Debt consolidation is nothing new, but it is certainly growing in popularity. Some people in Florida might even be using this method to avoid filing for bankruptcy, but there can be drawbacks to this method.
Debt consolidation is the most commonly-cited reason for personal loans, with 61 percent of loans used for this purpose. The concept is simple enough -- a person who has several debts and monthly payments spread across accounts takes out a personal loan, pays off the existing debt and then focuses on repaying the loan through single monthly payments. These payments are often smaller and much more manageable, but at what cost?