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Many people look for a loan to repay other liabilities or other loans they might have. What is commonly known as consolidating of loans is very common in our society. This is the most typical and most common mistake made when trying to get out of debt.
Looking for a new credit to repay the previous one is like trying to lose weight by hectically exercising without eating healthy. As a result, we only increase the debt, gradually getting into the debt spiral. What then happens is that you would have taken 10 steps backwards by acquiring a new loan when you were probably closer to clearing the other ones you have consolidated.
Instead of taking out new loans, you should analyse the available funds in your household budget and, above all, look for possible savings there. This can be done by reducing your monthly costs as much as you can to avail the money to clear the debts.
This way, you also realise you can live without a lot things and start practicing a minimalist lifestyle.
Have you consolidated a loan before? Please share how that worked out for you?