NerdWallet’s 2016 Debt Survey uncovered a significant increase in Americans’ total debt over the past decade. The average household credit card debt stands at $16,061, while the total average debt, including mortgages, is a staggering $132,529.
Despite this growing financial burden, debt consolidation offers a practical solution for households aiming to accelerate debt repayment, save money, and avoid late fees. Since each household’s financial situation is unique, it’s essential to explore the available consolidation options to determine the most suitable approach for your circumstances.
1. Debt Varieties Open to Consolidation
Consolidation applies to a wide range of debts, with credit card debt being the most commonly consolidated form. This popularity is attributed to the relatively higher interest rates associated with revolving credit, such as credit cards, compared to installment loans like home equity loans.
Additionally, other types of debts suitable for consolidation include:
- Credit cards
- Auto loan
- Home loans
- Personal loans
- Student loans
- Medical bills
2. How Debt Consolidation Works
First, the debt consolidation solution can pay off your high-interest debts. Then, instead of dealing with multiple payments, you make one fixed monthly payment towards the new loan, which usually has a lower interest rate. This makes managing your money simpler and less stressful because you have a single payment to keep track of, and it’s often at a better interest rate than before.
Question: Is it the right time for you to consolidate?
Answer: Before consolidating your debt, ensure that the loan or credit card you’re transferring to offers a lower interest rate and fewer fees, leading to potential savings. While consolidation can save you thousands in interest, it’s not always the optimal choice. Only proceed with debt consolidation if:
- You have a clear plan for repaying the consolidated debt and know the monthly amount and the expected payoff timeframe.
- You won’t accumulate additional debt during the consolidation repayment.
- Managing due dates for multiple accounts is a challenge; consolidation into one account will simplify payments and prevent late fees.
3. The benefits of debt consolidation
Consolidating debt offers plenty of benefits. While each person’s situation is unique, here are the most common benefits that can come from consolidating debt.
3.1. A defined timeline
One of the benefits of consolidating your debt is a structured timeline with a clear endpoint for when you’ll pay off your debt in full.
3.2. A single monthly payment
By combining your debt, you’re effectively paying off all your creditors, leaving you with one manageable monthly payment.
3.3. A lower payment
With a debt consolidation loan at a fixed, lower interest rate, your new monthly payment may be lower than your current payments.
3.4. An improved credit score
Your credit utilization rate accounts for 30% of your credit score. When you pay off high-balance credit cards by consolidating your debt, you reduce your utilization ratio. Over time, this will help to improve your credit score.
4. Get Your Plan for Debt Consolidation
We understand that debt can be a major financial burden. That’s why we offer a debt relief program, GuideToConsolidation.org, that can help you get out of debt faster, save money on interest, and improve your credit score.
There are a variety of options to fit your needs and budget, including:
- Debt consolidation
- Debt settlement
- Debt negotiation
Eligibility for debt amount:
- (Less than) $5,000 – $100,000+
Eligibility for debt consolidation
To be eligible for a debt consolidation loan, you typically need to meet the following requirements:
- Be a U.S. citizen or permanent resident
- Be able to afford the monthly payments
- Have an active bank account
4.1. How does GettoConsolidation.org do?
They guide you towards a debt-free future and offer a free, no-obligation consultation to understand your situation and explore personalized solutions.
- Review your finances with debt experts
- Discuss your debt goals
- Explore your options
- Connect to trusted lenders
- Personalized Results
- They combine expert advice with cutting-edge technology, ensuring you receive personalized results based on your profile, goals, and credit situation.
- Friendly, Expert Help
- Customer support is one of the biggest reasons why customers choose them. Their financial representatives are specially trained to assist you in making sound decisions and can address any questions you may have. They are always happy to help you!
- Convenient and Free
- They have extensive service hours, allowing you to get the help you need when you need it. Best of all, their services are free.
- Explore flexible options
- They will find the solution that best fits your unique circumstances.
- Stay on track with ongoing support
- They provide resources and guidance to maintain your progress.
In short, Debt consolidation can be an effective solution to help you easily manage your debts and save money in the long run. However, you should carefully consider it before you consolidate your debt to ensure that it is the right solution for you.