Rheeder, Jhb, South Africa Another important feature of consolidating bills is that it helps your credit record.As you accumulate more and more debt, you damage your credit record. Using one loan to consolidate your debt can solve your problems. When you take loans from many lenders, you have multiple debts. This also increases the risk of defaults and you have additional pressure of repayments.
That's where debt consolidation and other financial options come in.Debt consolidation entails taking out one loan to pay off many others.This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.Consolidate Your Debt Now Debt consolidation is combining several unsecured debts — credit cards, medical bills, personal loans, payday loans, etc. Instead of having to write checks to 5–10 creditors every month, you consolidate bills into one payment, and write one check.This helps eliminate mistakes that result in penalties like incorrect amount or late payments.