Americans are currently drowning in debt. With 1.027 trillion dollars owed in revolving debt, some who are worse off have decided to come out of credit card debt, through debt consolidation. If you have a lot of credit card debt, paying each card off on a monthly basis can be tricky. This is why there are cardholders who just have to carry over balances from one month to the next. Unfortunately, by doing this, they end up paying a lot more in interest payments, than they would if they paid off the full amount every month. Getting out of such debt can become very difficult. That is why debt consolidation is a welcome relief.
Consolidating your debt involves taking out a personal loan that you then use to pay off all your credit card debt. This means that instead of paying several different credit card bills with varying interest percentages, you only make one payment. Usually, such a loan will have a much lower interest rate and this can lead to significant financial savings, particularly so if you can quickly pay off your loan. It is important to note that this strategy may not work for everybody. Here are some advantages to consider.
Pros of Debt Consolidation
These are very straightforward and include the following:
Prior to settling on a debt consolidation loan, you need to shop around a little bit. These guidelines can help you make the right decision:
Once you have reviewed these things, you will be able to tell if debt consolidation is for you. If you decide that it is and you qualify to take out a loan, the funds will be transferred to your account. It is important that you use the money to pay off those credit card balances fully, and not spend it on other things. Once you have done that, you need to make sure that you don’t end up back in the same consumer debt that you were in before. Here are some tips to safeguard yourself in that regard:
If you are looking to simplify your personal finances, then you should definitely consider debt consolidation. With an 8% rise in credit card debt in 2017 alone, it is clear that more and more people are falling into the debt trap. You don’t have to be among them. Look for excellent debt management solutions to help you get out and stay out. Debt consolidation can help you recover from being overextended on your credit cards, and with proper management, you will be able to see better credit scores over time.
Member since: 30th January 2018
Mandy Bular is a freelance content writer. She has written many good and informative articles on different categories such as technology, health, fashion, education, career, travel etc. She is a featured...