Are you considering consolidating two or more of your debts? It can be a great move to make in securing a debt-free financial future, but before you make the plunge in choosing debt consolidation, there are a few potential mistakes to look out for. By ensuring that you are not caught unawares on these common pitfalls, you can more easily set yourself up to succeed in ultimately becoming debt-free.

Firstly, know that the loan hasn’t decreased at all just because the payments have. You still have to pay back the same amount, and the longer you delay paying it off, the more it ends up costing you in interest. Stay on top of your payments and utilize the freedom of having lower monthly dues to bring down your debt even more aggressively. Create a hard-hitting repayment strategy and stick to it; you won’t regret it.

Also, watch your interest rates closely because they represent the actual cost of the loan. Try to get loans with fixed rate interest—variable rate interest loans may have a lower initial payment, but because your loan company can change your interest rate as they want, you may end up hurting yourself in the end by paying more in interest.  Additionally, selecting a fixed rate interest debt consolidation plan will help you stick to your repayment strategy much better by minimizing surprises and risks along the way.

Do be aware of the various terms and conditions before you commit to a particular consolidation agreement. There can be a surprising number of allowances for loss-making terms hidden within your loan documents; you don’t want terms that include balloon payments (which can mean that you will still owe money even after you have finished your last payment), or penalties for pre-paying your loan. Remember that the longer you are paying off your loans, the more you are paying for your loans, as your monthly interest bill ends up being the cost of the loan. Some of the trickier loan officers may try to extend your loan repayment period, which looks nice at first, but then they neglect to get you a better interest rate. When this happens, you only end up hurting yourself in the long run.

Don’t settle for less than what you know is right for you in helping you improve your financial situation. There is much to learn before committing to debt consolidation and, in this case, being as knowledgeable as possible will have been a great gain for you.