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Debt consolidation can be a good idea to manage debt and roll them into one payment.
What Is Debt Consolidation?
Are you currently holding debt and want to find a way to get rid of it? If so, consider debt consolidation.
What is debt consolidation? It’s a financial strategy that involves combining multiple debts into a single loan.
Debt consolidation can be a valuable tool for individuals struggling to manage multiple debts who are looking for a way to streamline payments and save money on interest. That being said, if your debt is manageable with moderate-to-low interest rates, you may want to hold off and pay them without debt consolidation.
When Is Debt Consolidation a Good Idea?
If you have high-interest rates on your debts, consolidating them into a single loan and negotiating a lower interest rate can save you significantly over time. For example, a credit card’s interest rate could be over 20%, but a debt consolidation loan will have a much lower rate.
Another reason to look into debt consolidation is if you have multiple debts with a wide range of due dates. It’s challenging to keep track of all of these payments. By consolidating these debts into a single loan, it’s easier to manage the payments and avoid late fees.
Lastly, if you’re struggling to meet minimum payments, you can consolidate your debt and pay them back on a longer repayment plan. This makes it easier to budget for your debts and avoid defaulting.
Consolidating your debt also puts a timestamp on your debts and gives you a plan. It’s gratifying to see the plan and know that by the end of the timeline, your debt will be paid off.
Continually making minimum payments can become a never-ending process. We recommend checking out Americor — a reputable debt consolidation company that helps millions of Americans erase their debt.
Hot Tip: Debt consolidation helps many Americans recover from long-term debt. Check out Americor to see how you can get started.
When Is Debt Consolidation Not a Good Idea?
Debt consolidation is extremely helpful for many consumers, but not everyone. If you’re carrying a manageable amount of debt and it’s a small amount, it may not be worth consolidation.
The rule of thumb is this: If you can afford to pay off your debt within 6-12 months at your current pace, you’re better off without consolidation.
Check out our article on the two popular methods of managing smaller amounts of debt!
Debt can be scary but it’s manageable with the right tools. Debt consolidation has helped millions of Americans become debt free.
If you’re considering debt consolidation, it’s important to carefully consider your options. Consult with a financial advisor or credit counselor to determine the best course of action for your specific situation.
For help consolidating your debt and creating a plan to reach debt freedom, check out Americor here!