By consolidating he will be combining all his outgoings i.e. Mortgage, loans, credit cards into one easy payment. Most companies can arrange it that you pay out less per month by combining all your outgoings than you would be paying now. This is true, however it takes longer to clear the debt.
If your brother had a mortgage, a credit card and a loan the companies can reduce his payments per month by $400 per month however he has to take them all out for the same time as the mortgage which is usually around 30 years, this is why the payments are lower.
He could clear his loans and credit cards in a shorter time frame but if he is in debt and needs to clear his loans and credit cards this is the ideal thing to do however he should get rid of the cards completely after they have been paid off. |