[The Budget Man]

I am astounded how easy it is to tell half a story and be believed.

People often tell me that they are saving money because they have consolidated their credit card debt, car loan and store cards onto their home loan. Now they have a lower repyment!

It's only half the story!

You see.... What often happens is that short term debt such as credit cards is actually turned into long term debt on the house loan.

The bite is in the tail. If you do not pay off short term debt quickly you become incredibly expensive.

Yes it looks good to turn a 15% loan into a 5- 8% loan. But if you then take 25 years to pay it off then you have paid a huge amount of interest for a very long period of time.

Debt Consolidation is a great strategy if you pay off the amount you consolidated quickly.... otherwise you are ruining your future lifestyle.

So is Debt Consolidation a myth or a good idea? The answer is in the way you repay it.