If you have a bad credit rating your debt consolidation loan may carry a high interest rate.
Although debt consolidation can help some people, for others, it can create even bigger debt problems. For many people, payments to a debt consolidation loan can work out more expensive.
Higher interest rates
It is important to remember that if you have lots of debt, or if you have missed payments on your debts, this will have affected your credit rating.
You will find that the only way you can borrow more money is at a higher interest rate. If you have to borrow money at a higher interest rate you will pay more money back over the lifetime (or term) of the loan.
Bigger monthly payments and longer loans
You may have to make a large payment to your debt consolidation loan each month, or you could find that you are paying the money back for a long period.
If you are applying for any kind of loan you should always check how much the payments are each month, and how many payments you will need to make over the lifetime of the loan.