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Living offSocial Securitycan be financially challenging.
It can be easy to accrue debt when relying on a fixed income for all expenses.
One option that might seem appealing to pay off debt is consolidation.
Financial experts weighed in on the pros and cons of retireesconsolidating debt.
Pros
For some retirees, debt consolidation might be the right move.
Debt consolidators can benefit from certain balance transfer opportunities, which provide a zero-interest introductory period, he explained.
This time can be used by borrowers to pay down their balance without accruing additional interest.
Better Credit Rating
Consolidating your debt can improve your credit score.
This is one of the factors considered in your credit score.
Making on-time payments will also improve your credit score.
Cons
Its important to understand the drawbacks of debt consolidation, as well.
The downside is that refinancing often means extending your repayment term, he explained.
Even applying can have negative consequences for ones credit score.
A denied credit card or loan system can in turn hurt their credit.
Without adjusting spending habits, it could create a less manageable problem down the road, Guarino added.
A planned approach, considering factors like cash flow, existing assets and long-term goals, is essential.
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