When someone decides to consolidate their loans, they are taking out one large loan to replace all of the many loans (or the single big loan of a higher interest rate) that they have taken out over the course of their lifetime. Consolidating loans is one of the best things you can do for your credit, and it is also a great way to ensure that you have a single, easy payment to make on a monthly basis at a low interest rate that is, for all intents and purposes, the only loan someone needs.
What Happens if You Need More Money?
Sometimes the question arises, however, of whether or not you can get more money than the loan consolidation is for. If one is in need of a loan in addition to the consolidation, it would not make much sense to consolidate all of your loans (turning all of those loans into one loan) only to get another loan right after.
Luckily, loan consolidation is not limited to the amount you are consolidating. You can - assuming you are not consolidating an amount that is so high that you run out your equity on a secured loan - always borrow more than the consolidation costs.
This makes a lot of sense, because you are not "approved for consolidation" when you are consolidating a loan. You are getting approved for a loan, and it just so happens that that loan is being used to consolidate your other debts. If you need extra money, then all you are doing is getting a larger loan, and using a portion of that larger loan to pay back your debts.
If you think you will be in need of more money in the future, you do not want to take out another loan, because that will be harmful for your credit and create some of the same difficulties you were trying to avoid when you consolidated your loans in the first place. Instead, take out more on the loan you are using to consolidate your debt, and keep all of the money you have borrowed coming from a single loan at a single location.
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