Should a Christian get a debt consolidation loan? This has become an interesting topic of debate over the past few years. On one side of the debate are those that say that a Christian should manage their money faithfully, and therefore should not need a debt consolidation loan. The other side of the debate says that even a Christian can lose their job and get into financial trouble, and for many a debt consolidation loan is a wise financial decision.
Of course there is no right answer in this debate. Both sides make valid arguments.
If your financial problems are caused by excessive spending, and now you are looking for Credit Card Debt Consolidation, it is probably true that a debt consolidation loan is not the first step you should be taking.
However, if you have lost your job or had a medical problem that has put you behind, as a Christian a debt consolidation loan may be a good idea.
How should a Christian decide whether or not to get a debt consolidation loan?
The first step is to not confuse the result with the symptom. Ask yourself why do you need a debt consolidation loan? Is it because your spending is out of control?
That question can best be answered by putting yourself on a budget. Starting today, keep track of every penny you spend, and have your spouse do the same. After one month take a look at your spending, and divide all of your spending into "wants" and "needs". If you find that most of your spending is on wants, and not needs, you have a spending problem.
For the second month reduce your spending only to essential items, and see how much money you now have to service your debts. If you can reduce your expenses to the point where you can service your debts on your own, that is clearly the best option.
And this is really the key point. A debt consolidation loan is not always the solution. Sometimes consolidating only serves as a Band-Aid on your spending problem.
As a Christian, you want to develop a realistic and balanced budget that will allow every debt to be paid in full if possible (Proverbs 16:9). Your goal should be to retire your debts (Psalms 37:21, Proverbs 3:27-28).
Then, don't get into any more debt, including bank and personal loans, and cut up your credit cards if you are unable to pay them off each month (Proverbs 24:3).
If your spending is under control, a debt consolidation loan may make sense if it helps you reduce the interest you pay, and therefore get out of debt faster.
If you are now working at a good job, your credit may be good enough to allow you to qualify for a lower interest rate on a student loan consolidation loan, which reduces the interest you pay, making it easier to repay your loan faster. Mortgage Debt Consolidationis often a good way to accomplish that, because a mortgage usually carries the lowest possible interest rate.
Your goal as a Christian should be to get your spending under control first, and then decide if a debt consolidation loan is the correct solution for you.