Almost anywhere you look you’ll see them — ads for debt consolidation.  It almost sounds to good to be true, so is it really the best move to consolidate your debt?

Here are some reasons why you might want to consolidate your debts: 

1. You’ll have just one payment to make which makes managing your money MUCH easier.

2. Generally a debt consolidation loan utilizes your home equity, so you’ll have a much lower interest rate than you’d ever get on a credit card.

3. Debt consolidation loan payments are often lower than the total of what you’d be paying if you were paying each loan or credit card balance individually.

There are some negatives you should consider before jumping into a debt consolidation loan, however.  First of all, you need to make a commitment to stop using your credit cards so that you don’t end up in the same place all over again.  Second of all, if you choose to consolidate fixed-term loans, such as car payments, you’ll likely end up extending the length of the payments.  Lastly, you need to be absolutely sure you can afford the new payment every month because it is tied to your house.  If it ever happens that you cannot make your payments, you could lose your house.