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Drawbacks to Debt Consolidation? Not when you use LoanAway

Drawbacks to Debt Consolidation 2017-10-03T14:01:10+00:00


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drawbacks to debt consolidationAre there drawbacks to debt consolidation? Yes, and it’s a BIG one.

While LoanAway is happy to offer consumers the opportunity to batch up their debts and repay them in one stream, we also feel a need to be impartial and reveal some of the drawbacks to debt consolidation.

While we believe it wise for anyone who feels overwhelmed with debt to pursue this option, we just want to make sure you know what these drawbacks to debt consolidation entail so that you are at your most informed before moving forward.

Defeating a debt is not always easy, and sometimes leaves us having to make some sacrifices or concessions and once you’re done going over this list of drawbacks to debt consolidation, you’ll have the best idea of what works for you and what doesn’t.

Drawback #1 – Falling into greater debt

The greatest of all drawbacks to debt consolidation loans is that you run the risk of incurring more debt. How? Well, the loan will instantly repay all your outstanding debts, including your credit cards.

Suddenly having access to fresh credit might be too tempting to resist (especially if your previous debt restricted your spending). While we recommend that you do not cancel credit cards for credit score reasons, if you know yourself well enough to know you’ll fall into the trap, do cancel your cards until you’ve repaid your debt consolidation loan.

Drawback #2 – It could foster bad habits

This ties directly into the first drawback. One of the reasons you had your debt spread out across multiple channels is because you allowed yourself to lose track of your finances.

While a consolidation loan can lead to immediate relief, it can program your brain to start thinking that you can neglect your liabilities with the subconscious knowledge that you can always go back for another debt consolidation loan to solve a problem you didn’t need to find yourself in.

Drawback #3 – You might choose the wrong lender

If all you want is to be able to hit your pillow and fall fast asleep at night, chances are you’re so stressed out about your finances that you’re liable to make a rash decision.

The most deceptive of drawbacks to debt consolidation loans is who you get them from. One of the worst problems we’ve heard of are small-time lenders who came into the private loans business expecting to make some easy money and end up running into financial troubles that result in them selling your loan.

Typically when this happens, you will not be advised of the change and the new lender handling your debt can increase your interest rates without your consent.

Now That You Know

Now that you know what the drawbacks to debt consolidation loans are, we’d like to reassure you that LoanAway is a well-established company, as opposed to some of the fly-by-night lenders who stick posters on lampposts.

Our loan agents are exceptionally trained to help you through the process of applying for a loan and then advising you on the best steps to make the most of your debt consolidation efforts and not fall back into the same trap.


We are committed to provide best customer experience possible. Currently we offer personal term loans in Ontario, Alberta and Newfoundland, but do check back with us soon, as we are working on expanding our reach to other provinces and territories.

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