Please eli5 how debt consolidation works and how it affects your credit. is it a bad thing?
In: Economics
Basically instead of having 5 different loans with 5 different lenders at 5 different interest rates, a debt consolidation company pays off all those 5 loans and you now have one loan with one rate with the debt consolidation company. You do need to secure it with collateral in most cases and you may or may not get better terms. But at the end of the day, it becomes a lot easier to manage.
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