Debt consolidation is perhaps better inside a home loan as you struggle with regular expenses so happy to pay over 30 years term. Too many account-keeping fees for multiple loans at various interest can disturb people and force them to consolidate them into one personal loan and pay them off in a couple of years. Debt consolidation is popular for credit cards given the interest rates and monthly fees. When people are about to default on their multiple loans they usually don't hesitate to refinance everything in their home loan to secure their credit history. It is always necessary to plan 6 months ahead with a good payment history in existing loans for consolidation to have the plan successful with a minimum interest rate.
Well, if you don't pay off a loan at all to a lender that specific lender will never give you a loan in the future. Your credit file will delete more than 5-year-old defaults but some lenders might become fussy about inquiries from third-party credit collectors who may keep putting inquiries on your credit file after 5 years. Anyway, lenders will see and ask the borrower why there is a third-party inquiry even though it could be a $100 default on a postpaid mobile contract.
It's better you don't moakaround with your credit history if you have plans to buy a car or home in next 5 years. Always remember that every inquiry for a loan makes you a borrower with bad habit keeps reducing your credit score may result in missing out attractive interest rates from popular lenders.
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