Debt consolidation loans are touted as the immediate fix for the financial quagmire that is pulling you down. These loans will reduce your immediate interest rates on unsecured debt such as credit cards and signature loans. A single payment that covers all of your unsecured debt is less than the sum of all the individual payments if made separately. At first blush, debt consolidation loans can sound like the messiah of financial sin.

But what every borrower needs to remember is that consolidation loans are only a lifeline, if it is recognized as the extreme measure it truly is. The problem is not the payments. The payments are the symptoms. The debt is the problem. For most people who look seriously at debt consolidation, the cause of the debt is overspending. If debt consolidation is not accompanied by debt counseling, and a radical change in spending the debt consolidation loan becomes the first knot in the noose.

In most cases debt consolidation does not reduce the amount of interest you pay on the debt, it reduces the rate of interest. Debt consolidation loans spread the debt over a wider range of years, typically 10 to 20 years. So, you may not, in fact, pay less interest for debt, but in reality pay more.

A common pitfall that is frequently ignored when borrowers seek relief with a debt consolidation loan is that what was once unsecured debt is now secured by your home. Now instead of one loan attached to your home, there are two. Two chances to default, to chances to lose your home. And when the real estate market falls, as it is currently doing, you could end up having more debt than equity. So if you plan or need to sell your home, you are in a pretty bad position.

Debt consolidation loans can be the lifeline that puts your family back on the firm ground of financial solvency. But, if it isn’t also accompanied by a radical change in spending habits and financial counseling, it can become a deadly noose. Take the first step to curbing spending by cutting up those credit cards as soon as the loan as cleared the credit card debt. This first step is a handhold financial counselors recommend that the family cut up all but one credit card when the credit cards are cleared by the consolidation loan. on the lifeline that your reach firm ground. Debt consolidation loans can be your noose or your lifeline—you decide.