Debt consolidation loans are advertised heavily and may seem an attractive proposition. They offer to consolidate your outstanding debts into one loan with lower monthly payments.

What they don't tell you is that the loans will actually cost you more in the long term. The monthly repayments may be lower, but they are spread over a longer term which means that you will pay more interest.

Debt consolidation loans are usually secured against your home, and this is something that takes borrowers by surprise. If you have several unsecured loans and then take out a debt consolidation loan, you automatically put your home at risk if you are unable to make your repayments.

If you do take out a debt consolidation loan, don't think that it means that you will not fall deeper into debt - you must also change your behaviour by not borrowing any more.