Many people try debt consolidation, but not all emerge better off.
Some borrowers wind up in worse shape, either because they run up their credit cards again or because their debt remains overwhelming despite the better repayment terms.
It’s typically considered for people who have high consumer debt.
But most of the time, after someone consolidates their debt, the debt grows back. They still don’t have a game plan to pay cash and spend less.
Myth: Debt consolidation saves interest, and there’s one smaller payment.
Truth: Debt consolidation is dangerous because it only treats the symptom.
Others succeed because debt consolidation is part of a bigger plan to gain control over their finances.
A loan with a longer term may have a lower monthly payment, but it can also significantly increase how much you pay over the life of the loan.
Do you feel like your life is on hold because you’re trapped by all your debt payments? Consolidating your debt could be the answer you’re looking for.
It can help lower your monthly payments and get you out of debt faster so you can be in the driver’s seat of your own finances.
The following four steps will walk you through calculating how much debt you have, choosing the debt consolidation loan, setting a timeline to be debt free and teaching you how to control your spending.
Consolidating multiple credit accounts into one new loan with a single payment may help you lower your overall monthly expenses, increase your cash flow, and eliminate the stress of multiple monthly payments.
Debt consolidation allows borrowers to roll multiple old debts into a single new one.