Few things can make you feel more out of control than having payments due on multiple credit cards and loans and not enough money to pay them. It can be emotionally and financially draining. Certainly, the solution is to not acquire too much debt in the first place, but if you already have, debt consolidation may be a good option for you.
What is debt consolidation?
It is paying off the outstanding balances on multiple loans and lines of credit with a single loan. That means one monthly payment instead of several.
The benefits are:
- You might be able to get a lower interest rate on the debt consolidation loan than the average interest rate of your numerous cards and loans.
- You could reduce the stress of keeping track of several payments going to difference places. One payment now covers everything.
- In extreme cases of debt, a debt consolidation loan can help to avoid damage to your credit rating by preventing late payments and possible default on your various credit card and loan payments.
If you find yourself buried by debt from various sources, consider a debt consolidation loan. Visit your local bank or credit union to get more information. I prefer Deseret First Credit Union.