What is Debt Consolidation?
One of the most difficult things about personal finance is the relative lack of straightforward information out there - not to mention information tailored to people in Ohio. Based on this, there’s a good chance that you’ve heard of debt consolidation but there’s also a good chance that you’ve heard multiple descriptions of it. Let’s set the record straight:
Debt consolidation is the act of taking on a new loan to pay off one or more current loans. The ideal situation is that you achieve a lower interest rate so more of your money can go straight to that principal balance.
So the next question is, what does that mean for you? In a nutshell, it means you can make your life a lot easier and save money at the same time. By combining multiple debt accounts into one, you only have one payment to make each month. And by cutting down the interest you’re paying, more of your money can go straight to the principal balance. That means a shorter payoff period for you!
Will Debt Consolidation Work for Me in Ohio?
Now that you understand how debt consolidation works, how can you know if it’s the right situation for you? Take a look at the scenarios below and determine which one best describes your situation:
I can make all of my monthly payments, but I’m feeling extremely frustrated because I can never seem to make any progress on actually paying my debt off.
I’m struggling to make all of my monthly payments, but if they were lowered just a bit I’d finally be able to get my head above water.
I’m struggling to make all of my monthly payments. At this point, I’m not even sure if a discounted payment would be enough to help me.
If one of the top two boxes describes your current situation, then debt consolidation may be just the tool for you. It will help you streamline your payments, it could potentially decrease the amount you’re paying (depending on the offer you take), and it can decrease your interest rates.
If number three feels more like your situation, then you may need a little bit more help through a local Ohio credit counselor or possibly even a bankruptcy lawyer. (Although it’s worth noting that you lose nothing by trying debt consolidation first!)
What Should I Do If I’m Not Approved?
So what happens if you go through the process of applying for debt consolidation and you’re not approved? Keep on moving forward!
The debt consolidation approval process starts with your credit score - so if your credit score wasn’t high enough to get approved, then that’s something you can definitely fix. Just keep making your payments on time every time, avoid taking on any new charges, and always dispute errors on your credit report. In a few more months your score could increase quite a bit and that debt consolidation option could be within your reach!