No matter how many aspects of your financial life you work to turn around, debt can be a giant burden halting all progress before it begins. It’s the elephant in the room that must be cleared before a solid financial foundation can be reconstructed.
But herding that elephant out is a tall order.
If you’re dealing with overwhelming debt in the form of several different accounts, all with different minimum payments, balances, and interest rates, debt consolidation is one viable option to consider.
Debt consolidation essentially takes all of your debt and rolls it into one large lump sum that only requires one monthly payment. This may be in the form of a loan used to pay off each creditor leaving you with one balance instead of several; credit card transfers so all credit card debt is under one card, perhaps with a lower interest rate; or a plan worked out with a debt consolidation company in which a more manageable debt payment plan is established with your creditors and you pay the third party company instead. If you quickly want to check your rates today, try ReadyForZero’s secure debt consolidation tool whenever you’re ready.
Sound interesting? Here are just a few ways debt consolidation can get you back on stable ground.
It creates a more organized system.
Juggling debt through multiple creditors isn’t for the faint of heart. It’s daunting enough just to keep up with due dates and different payment amounts for each account. Things can quickly fall through the cracks — leading to fees and more credit dings that are hugely detrimental for someone already dealing with a less than rosy financial picture.
Debt consolidation takes out the guesswork by establishing one set, monthly payment. Just one.
Streamlining the debt repayment process also allows you to look at your entire financial picture and establish a budget that will fluctuate less, or not at all. In addition, it negates the need to keep up with the paperwork from a hoard of different creditors.
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It can lead to more sound financial habits.
If credit is your crutch, opting for debt consolidation through a third party will likely require you to close open credit cards and avoid acquiring any new debt until your current debt is entirely paid off. It may sound like a cruel punishment, but if your debt was the result of out-of-control spending, it could be exactly what you need to get off the hamster wheel of debt accumulation.
In addition, some companies may even require that you enter debt counseling as part of the terms of your agreement. This could potentially help you fix the behaviors that helped perpetuate the debt in the first place.
Even if a self-evaluation isn’t part of the process, taking such a huge step to get your debt under control could create the space to make some long lasting money-management changes.
It could potentially be better financially.
If high interest rates and payments are keeping you stuck in a place of only being able to pay the minimums each month, it’s possible that debt consolidation could be a better deal financially.
Consolidating by transferring balances to a credit card with a lower interest rate, for instance, would instantly cut down on the amount of money you’d be throwing at your debt in the long run. Debt consolidation companies can sometimes work their existing relationships with creditors to get you a lower interest rate or payments.
Speeding up the debt repayment process or lowering your monthly financial burden can help create a more solid foundation now and into the future.
It can help alleviate the emotional effects of debt.
Without a plan of action, debt can cause an unmanageable amount of stress. It can easily take up residence in your mind at the most inopportune times and refuse to let you concentrate on the things that really need your attention.
Your debt may not disappear quickly, but you’ll at least have the peace of mind from having a plan and knowing when the end will come. In turn, you’ll have the ability to start reconstructing a healthier financial picture going forward.
Knowing your options
Debt consolidation isn’t for everybody. Some financial pictures will look worse – not better – once debt consolidation is applied. That’s the thing with personal finance – it’s personal.
But, if you are dealing with large amounts of debt and you’re not sure what you’re next step should be, it’s worth running the numbers. That alone can signify something huge – you’ve reached a point where you know that enough is enough.
Are you ready to take action? Don’t forget you can check debt consolidation loan rates now using the ReadyForZero debt consolidation tool.