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The pros and cons of debt consolidation are both numerous and should be examined in great detail by anyone considering taking this course of action. We have all borne reluctant witness to the worldwide catastrophe which irresponsible borrowing and lending has caused on a much larger scale of late and the last thing that any of us needs is a miniature version of same striking our family budget and finances.

The first step to weighing up the pros and cons of debt consolidation is to sit down with a pen and paper - and a calculator, if necessary - and work out precisely our outgoings at the moment, what our outgoings would be if we were to choose debt consolidation and determine also in this connection how much we would ultimately be paying to pay the debt back in both circumstances.

We also need to consider how long it will take us to pay the debt back if we are to consolidate and how that may affect any future plans we have in mind. The problem with debt consolidation is that although we may be paying out less in the shorter term, we may be paying back a lot more at the end of the day, over a much longer period of time. It may therefore be worth the pain of paying out more each month in the short term to free ourselves of debt altogether much sooner.

How we got in to so much debt in the first instance is a major factor we have to consider. There is no point our reducing our monthly outgoing significantly in order that we once again get carried away with our spending again live beyond our means. We should be attempting to save as much money as possible, ideally with a view to paying off the consolidated debt earlier than planned.

Once the debt has been consolidated, it is a good idea to remove all temptation from our way by closing all store cards, credit cards and convenient sources of unsecured lending. We should not fall in to the trap of deciding that we will keep them, "Just in case something comes up." This is a sure fire way of falling in to the trap described in the above paragraph. Close of the accounts and destroy the cards.

The pros and cons of debt consolidation will therefore relate to each of our circumstances individually and by following the procedures outlined above, we have to very carefully determine which way the scales will tip in our favour. Only in this fashion will make the decision - to consolidate or not to consolidate - which is right for us in both the short and long term.

Learn more about this author, Gordon Hamilton.
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