Understanding the pros and cons of debt consolidation may seem obvious to some and help make the decision process much easier for others. There certainly isn't any shortage of any advertisements aiming for your business, and with good reason; if you qualify for them, they work wonders for your pocketbook.

Here are the key advantages;

1. Lower monthly installments.
If you are currently paying multiple creditors with varying interest rates, you might as well flush a couple hundred dollar bills down the toilet while you are at it. When you consolidate your bills you frees up monthly cash flow  sometimes by as much as 80%.

2.Lower, fixed, interest rates.
When paying off your other balances in full, you effectively destroy money-zapping higher interest rates, saving your bottom line in the long run.

3.One payment.
Say goodbye to multiple accounts. One company takes the burden, and you gladly hand them over their fair share of cash every month as agreed.

4.A single creditor.
With one payment also comes one creditor. Instead of feeling like you are on a long wrong to nowhere, dealing with one creditor really has a way of easing much of the stress of high debts.

5.The whole "consolidation" thing.
Consolidation companies not only deal with our creditors for you, they also help reduce your interest to within manageable means.

and the ugly...

1. Get more into debt.
You got where you are now because of bad spending habits. If you free up cash flow, try to invest in your IRA or something that pays you back over time instead of investing in liabilities.

2.May cost more.
This is a double-edged sword since some people may pay less. It literally depends on your own situation, but some may pay more in interest over the long term.

3.Dealing with the wrong debt consolidation company.
Not all of them are out for your best interest. If you are unsure who to ask for honest help, your local librarian is your number-one go-to person.

Debt consolidation, much like anything with money attached to it, must be given a serious consideration to make sure it fits your lifestyle. Are you Ok paying more in interest over the long term in return for a higher monthly cash flow(if that is your situation)? Will you invest the extra cash flow wisely, or be a fool and easily be departed with your hard earned money.