Marketers pronounce debt consolidation loans as the instant fix for the dire financial predicament that is pulling your family under. With a mere stroke of the pen your financials woes are reduced to a snivel. Now instead of many high interest payments each month, there is only one. And the interest rate on consolidation loan is significantly less that the interest rates on your credit cards. An answer to a prayer, debt consolidation loans, can be the savior of financial sin.

And it should be, but unfortunately it often isn’t. Debt consolidation loans should not be undertaken lightly. Consolidation loans merely treat the symptoms of financial illness; they have no effect on the underlying spending virus. Borrowers need to recognize that poor spending decisions have brought them to this precipice. In order to be truly successful debt consolidation loans must incorporate financial counseling and a commitment to change the family spending habits.

While it is true that debt consolidation loans reduce the high interest rate associated with credit card debt, in most cases it does not actually reduce the amount of interest you pay. Debt consolidation loans merely distribute the debt and the accompanying interest over a wider span of years. Debt consolidation loans give you payment relief and not much more.

Another important thing to be aware of is that what was once unsecured debt is not secured, usually by your home. Debt consolidation loans can double your risk of losing your home and can make your home more difficult to sell, should you need or want to. When real estate market values fall, you may find yourself in position where you have far more debt than equity.

The road to financial solvency can be paved with a debt consolidation loan. But unless it is reinforced with a radical change in spending habits, it is road that is bound to swallow you in potholes. Cutting up all but one credit card once the debt consolidation loan has cleared the debt, is one sure way, financial counselors say, to start on a new path to financial freedom. By spreading the debt out for a longer period of time, debt consolidation loans can ease the symptoms of too many high interest debt payments going out each month; only the borrower can cure the root of the financial illness.