The popularity of debt consolidation has increased in recent years due to many reasons. The main reason is that it enables users to merge all their debts into single loan agreement with reasonable monthly payments and loan terms. Interesting fact revealed by APACS that only in Britain the numbers of credit cards are higher than the numbers of people living there.

According to a careful estimate, the population of the United Kingdom is 60 million and reported numbers of credit cards by the year 2008 were 71.3 million. However, most people prefer taking out debt consolidation loans, while many others prefer taking help from debt solution like debt settlement plans or debt management plans.

Benefits of Debt Consolidation Loan

This loan is the best option for those who are having more than one loan agreements and are unable to pay off all of them. People having multiple loans like credit card debt, overdrafts or huge purchases, small loans often find themselves unable to pay off all these loans. Also, there are clear chances for such people to miss their payments due to having many debts at the same time. Their payments are more likely to be missed, late and expensive. On the other hand, debt consolidation loan merges all such unpaid loans into single loan and allows the borrower to pay off a single reasonable monthly payment.

Downside of Debt Consolidation Loans

It is worth to have a debt consolidation loan to deal with financial troubles; however, sometimes it does not appear as a suitable option. This is due to the following disadvantages of debt consolidation loan.

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The practice of disguising illegally obtained funds so that they seem legal is known as Money Laundering. This practice is a key of underground economy. It is defined under common law as crime. Its definition is different from its jurisdiction.

It is considered as engaging in financial transaction to hide identity or illegally obtained money.

British law defines money laundering as under,

“The act is defined as taking any action with property of any form which is either wholly or in part the proceeds of a crime that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial ownership of said property.”

The money laundering was applied to financial transactions related to organized crime in the past. But now it has more wide meaning.

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Guernsey is a small island located in the English Channel. An Anglo-Norman population. This island is located closer to the French coast than to the English one.

At the close of the Napoleonic wars, the island, like several countries, was in pitiful condition, both physically and financially.

No money

Sea walls, roads, markets were needed.There was no manpower shortage. but there was no money to pay for these works.

The money used by the people on the island was the money from England, the pound sterling. But, like after any war, the financiers were calling back the money advanced to finance the slaughter, and the pounds sterling were very scarce everywhere.

The island had an autonomous government, “the States of Guernsey.” So it had the rights inherent in all sovereign government, among other rights, that of regulating the volume of money in circulation in the country. But, no more ethan any other country, the States of Guernsey had thought of exercising this sovereign prerogative.

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Here are some thought provoking quotes on money and banking.   I hope you will enjoy reading them. They become even more interesting as you see them in perspective of current global financial crisis.

“The bank hath benefit of interest on all moneys which it creates out of nothing.” — William Paterson, founder of the Bank of England, 1694.

“All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.” — John Adams, letter to Thomas Jefferson.

If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations. — US President Andrew Jackson.

“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” — US President Abraham Lincoln

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