If you have multiple debts, then you also get multiple bills every month. Keeping track of what you owe and to whom can feel like a moving target. Bill consolidation can combine your debts into one simplified monthly payment.
Bill consolidation can save you time and money. It can also simplify your debt repayment so it is less stressful to budget for what you owe.
Stop Struggling to Pay Bills
Your bills are probably due at different times each month, and budgeting for different minimum payments on revolving balances can make it even harder to keep track of where your money is going.
If you are struggling to pay your bills, it's good to do a self-assessment to figure out what is causing you the most trouble.
Do you forget to pay your bills?
Forgetfulness is very common. If your bills are not set to auto-pay then it is surprisingly easy to miss a payment. If you can't set your bills to auto-pay because you may not have the money available, then your bills are probably too high.
Are your bills more than you can afford to pay?
People may seek bill consolidation because they can’t afford to pay the minimum payments on their debt. This problem can trap you in an endless loop of late fees and growing balances.
Are you only paying the minimum payments?
You might think you have your debts under control, but if you are only paying the minimum payments on revolving debt like credit cards or high-interest loans you are probably not making a lot of progress on your debt.
If any of these questions resonate with you, then it might be time to consider bill consolidation.
How Bill Consolidation Works
Bill consolidation allows you to pay off your existing debt with a single loan that combines what you owe into a single monthly obligation. The most common form of bill consolidation is a debt consolidation loan.
This loan type can be used to combine many different types of consumer credit including:
The Benefits of Bill Consolidation
On top of the logistics of paying your bills on time, you are probably paying more in interest than you should. Each of your debts probably has a different interest rate and unique terms that affect how much you owe each month and how much the debt is costing you over time.
While the fractional differences in interest rates may not seem like a big deal, over the life of a loan, it can mean the difference between thousands of dollars!
The Benefits of Bill Consolidation Include:
- Keep track of and pay one monthly payment
- Pay less money in interest
- Save money by avoiding multiple debt fees
- Spend less time organizing and keeping track of your debt
- Experience less stress related to your debt
3 Reason You Might Be a Good Candidate for Bill Consolidation
Successfully consolidating your debt requires motivation and organization. Good candidates for bill consolidation typically:
- You are motivated to pay off debt
- You are ready to commit to a budget
- You have a stable monthly income
Notice how we didn’t mention your credit score? Having good credit is definitely helpful in broadening your debt consolidation options, but it isn’t absolutely necessary. There are plenty of options available to people with fair, poor or even bad credit. In fact, consolidating your debt and implementing a regular repayment plan and other good habits can help you repair your credit over time.
Bill Consolidation Loans and Alternatives
If you have good credit and a steady income, you should find it fairly easy to get a bill consolidation loan. Shopping for a loan means looking for a loan that is an improvement on the terms of your existing debts. It is very important to make sure that your new loan is affordable and meets a few basic requirements.
Your bill consolidation loan should:
- Be large enough to cover all of your debts
- Have an interest rate that is lower than the average interest rate of your existing debts
- Have a minimum monthly payment that you can afford
- Have a repayment plan that doesn’t exceed the time frame on your existing debts
- Have annual and maintenance fees that are reasonable and affordable
Unfortunately, most people who want and need to consolidate their debt have a harder time navigating the traditional methods of DIY bill consolidation.
Fortunately, you don’t have to figure out a debt relief strategy on your own. If you have poor credit, lots of unsecured debt, and are open to paying off your debt in 12-48 months for less than you owe, then you are probably a great candidate for a debt relief program.
Accredited Debt Relief has solutions for people with many different types of debt and personal financial circumstances. Above all, our team Certified Debt Specialists is committed to helping you find debt relief solutions that are appropriate for you.
Contact us for a free quote.