Debt Consolidation

If you are struggling to pay off multiple loans or other significant debt, debt consolidation can help make your debt easier to manage. Many financial advisers recommend debt consolidation as one of the first steps to take in getting your debt under control.

How Debt Consolidation Works

Typically, those with financial challenges have several sources of debt. This can include a mortgage, a car loan, multiple credit card balances, and other outstanding loans. These debts are all due to different lenders, have different interest rates, and different due dates. To consolidate your debt, you take out a single loan to pay off these multiple debts.

Why Debt Consolidation Helps

With debt consolidation, you have one loan, one interest rate, and one due date. Often the interest rate is lower than the original rate, especially if your debt consists largely of credit card debt. The reduction in interest rate can save you hundreds or even thousands of dollars in the long term. In addition, you only have to keep track of one due date, making it easier to avoid accidental late fees.

If you are having difficulty managing your debt, consult with a finance professional about the benefits of debt consolidation.