If you need help overcoming high levels of debt, consolidation can be your best solution. Overwhelming debt can lead to late payment fees, lower credit scores, and financial stress.
Debt consolidation helps you reduce your financial burden, and give you the breathing room you need to restore your financial standing and regain control of your finances. Over time, you can begin to restore your savings and improve your credit score.
What is Consolidation?
Debt consolidation combines all of your outstanding debt into one single loan.There are many benefits including a lowered interest rate and monthly payment. This is a useful way for you to address mounting debt.
Choosing to consolidate your debts should be done with some consideration. You want to first examine your outstanding balances, interest rates, and monthly payments to choose the best consolidation option.
This will help you find a solution that lowers your interest rates and allows you one single monthly payment that you can manage easily.
Lower Your Interest Rate
A standard debt consolidation involves acquiring a loan from a peer-to-peer lender, credit union, or bank. The new lender will combine all of your outstanding debts into one new loan.
The new loan will usually have a lower interest rate than what was previously applied to each individual loan. The result is one monthly payment with a reduced interest rate, saving you significant amounts of money over time and getting you out of debt faster.
Overcome Credit Card Debt
A debt consolidation helps you overcome high credit card interest rates. These can be as high as 29% in some cases, making them difficult to pay off.
Using debt consolidation allows you to take high interest debt such as credit cards and reduce your interest burden for all of your outstanding balances.
Many borrowers are seduced by introductory interest rates of as little as 0%, only to be hit by a high interest rate after the introductory period.
Debt consolidation can also help address high student loan debt. Most people carry student loan debt for long periods of time due to the high costs of higher education.
For borrowers who are struggling to meet their monthly payments, consolidation can help them get current and avoid costly penalties.
Debt consolidation provides a number of benefits to borrowers. By reducing your interest rate burden and simplifying your monthly payment, you can take great steps in paying off your debt and rebuilding your financial future.