Americans are slipping ever deeper into hock. To cope, many people turn to debt consolidation loans, cash-out mortgage refinancing and retirement plan loans that promise relief but could leave them worse off.
Paying off high-rate debt such as credit cards with lower-rate loans may seem like a no-brainer. Unfortunately, many of these loans have hidden costs and drawbacks. And consolidation by itself can't fix the problems that led to the debt in the first place. In fact, such loans can make matters worse if borrowers feel freed up to spend more.