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Understanding Debt Consolidation
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If you are in debt, you probably know how difficult managing it can be, and just out of hand it can quickly get. But if you have multiple accounts that have accumulated debt, it may be advisable to consider debt consolidation. With debt consolidation, you can easily get out of debt by consolidating all those accounts into one account, so that you are making one payment instead of multiple payments every month. While you can consolidate smaller accounts and loans, often larger loans like auto loans or student loans are perfect choices for debt consolidation. Debt consolidation is offered by credit card companies as a service or by special debt consolidation companies. Thanks to so many options, nobody has to feel overwhelmed or defeated by debt. Debt consolidation can make paying off your debt a whole lot easier. If you are in debt, don’t wait for the problem to fix itself. Read on to learn more about debt consolidation.

Debt Consolidation

  • When to Consolidate
  • Credit Card Consolidation
  • Debt Consolidation Loans

When to Consolidate

It is important to not take debt consolidation too lightly. There are specific circumstances that may warrant debt consolidation and others where it may not be necessary. You should never, for example, consolidate debt just to extend the amount of time you have for repayment. It can end up costing you more over time. This may be especially the case if you get a variable-rate debt consolidation loan. Putting your home on the line would also be an unwise choice when consolidating debt. But there are a number of advantages for certain individuals. For one, if you make all your payments on time, and set aside extra money for emergencies, with lower monthly interest, you may be able to pay off debt quicker. Debt consolidation comes with lower interest rates than most credit cards and loans come with so you do not accumulate as much debt. It is important to note that if you have you don’t have a good record making payments, then you may not qualify for debt consolidation.

Highlights:

  • Debt consolidation is a big deal
  • Lower monthly interest rates
  • Save money over time

Credit Card Consolidation

If it’s credit card debt that is the problem, a number of credit card companies offer debt consolidation programs that can help. To find out if they offer these services, you can call your issuer for a deal. While a representative may not be willing to help, a supervisor may be more likely to consider it. You may be able to get your rate lowered so that you can pay off debt, but if you can’t because of poor repayment, you make be able to ask for a new card with a low rate. If you have multiple credit accounts that have accumulated debt, one option would be to take out a small personal loan that can be used to close accounts or pay off debt. Discover offers small loans of up to $35,000. If you qualify for a small loan, doing this would allow you to consolidate your debt into one loan payment each month.

Highlights:

  • Ask for lower interest rate
  • Ask for a new, lower rate card
  • Small personal loans for debt

Debt Consolidation Loan

Debt consolidation loans are another way to consolidate debt. If you have debt from multiple loans such as student loan debt, debt consolidation loans can make paying them back easier, costing you only one monthly payment. You can get debt consolidation from companies like National Debt Relief, CuraDebt or SoFi. Consultation is usually free and seeing if you qualify takes very little of your time. At SoFi, you can get rates as low as 5.19% APR, borrowing up to $100,000. SoFi charges no origination fees or prepayment penalties. You’ll have up to seven years for repayment, but if you lose your job, you can stop making payments until you find one. Best of all, SoFi will do everything they can to help you find a new job.

Highlights:

  • Free consultation offered
  • Consolidate your loans
  • Unemployment protection at SoFi

Conclusion

If you are struggling to pay off your debt because of too many accounts, it may be a good idea to consider consolidating that debt. With debt consolidation you can turn those multiple accounts into one easy monthly payment with a lower interest rate.