When you realize that you have too many credit cards in your hand, it is time to inform consolidation loan. As the name suggests, a credit card consolidation loan involves nothing but a taking a single big loan to repay many small loans so that you have just one debt in your hand at the end of the day.
What are the benefits of such a move? For starters, the different interest rate that you would be paying two different their credit cards would automatically become simplified. Since you will have just one loan in your hand, you need to bother about just one interest rate.
If you successfully get a low interest rate loan to consolidate all other debts, you will realize that the actual repayment goes more towards principal repayment instead of interest payment.
The second advantage of consolidation loan is the convenience that it offers. You can be rest assured that handling one credit card loan is the more convenient than handling many credit card loans at once.
If you have made the mistake of defaulting one or many credit cards, then keeping track of those credit cards that are active and up to debt and those which are active but in default and those which are neither active and in default will become very difficult.
In post consolidations scenario, you will have to deal with just single credit card debt and that is the end of the matter.
Now, you must have realized that all these points are focusing on mere technicalities and procedural difficulties. At no point of time we are talking about the difficult repayment of the debt. It is presumed that you have the ability to do so but finding it difficult because of the factors mentioned above.
On the other hand, if you actually finding it difficult to repay debt because of lack of funds, it is obvious that the debt consolidation is not going to be solution for you. Rather, you need a solution that will bring down the actual amount owed. As on date, debt settlement is the only solution that is popular in this regard.
If all the above factors fit, you should go for consolidation because you will probably have high credits score. On the other hand, if you already have poor score, then you can go for settlement to get rid of bulk of your debt very quickly.