A recent poll by a comparison site found that of the people who have taken out consolidation loans, three out of five will go on to running up further debts. The results also revealed that men and women are equally likely to accumulate more debt after consolidating multiple loans into one big debt. So why is this? The main reason many people chose to consolidate their debts is for the convenience and in hope of obtaining a lower interest rate. Once the debt is consolidated there is only one monthly bill that will pay off those lingering debts, no matter if they are credit cards, loans or mortgages.

The danger of consolidating debt however, is once the debt is stockpiled, it makes it easier for borrowers to obtain more money through other loans, such as credit cards and store cards, as the borrower is still only appears to be paying off one debt. The danger is, a consolidated loan may be one monthly payment, but it certainly is still part of a larger debt that must be paid off. A consolidated loan is not an answer to debt problems; it’s simply an easier way of dealing with it. It in no way will eliminate or reduce the amount you owe. Only one in four people say they manage to clear their debts early. That said, people who pay off their consolidation loans early are less likely to go on to accumulate more debt.