Are you struggling to manage all of your debt obligations? Would you benefit from combining all of your debts into one monthly payment, potentially reducing the amount you pay in interest and fees? If so, debt consolidation may be right for you.
Debt consolidation is the debt relief strategy of combining multiple debt obligations into one monthly payment to simplify the repayment process for credit cards, loans, and other bills. Consolidating debts can help streamline your payments and make managing your debt less overwhelming.
Consolidation is usually done using one of three methods:
Debt Consolidation Loans: By using the money gained from a loan, you can quickly pay off multiple debts and instead focus on one monthly payment. This method is better for people with a healthy credit score, as a lower score could lead to a high loan interest rate.
Credit Card Balance Transfers: The process of a balance transfer involves applying and being approved for a new credit card with low rates for balance transfers. This low interest rate is almost always an introductory rate, so make sure you read the fine print on any credit card applications to see how long the introductory rate lasts. Some credit cards even offer 0% interest rates for an introductory period on new cards.
Consolidate Debts Through a Debt Relief Company: In addition to combining multiple debt obligations into a single monthly payment, one of the perks to working with debt relief companies is receiving help from debt relief specialists. The debt relief specialists are there to guide you on your debt relief journey while a team of negotiators work directly with your creditors on your behalf to negotiate settlements and potentially lower the amount that you originally owed.
If you have the discipline to stick to your consolidation plan, you could see your debts reduced in a few years. Benefits of consolidation include:
Depending on your unique financial situation, debt consolidation might not be your best option. Consider the pros and cons before committing to a debt consolidation strategy:
Simplified Debt Management: Consolidated debt means you only have to worry about one payment each month, instead of multiple payments, amounts and due dates.
Pay Off Debt Faster: If you consolidate your debt, you’re much more likely to pay off debt sooner than if you continue to only make the minimum payment.
Fixed Payments: Most consolidation plans give you a fixed payment each month. With a predictable payment, you can create a budget that leaves room for other expenses or needs.
Temptation to Spend: Debt consolidation on its own will not help you develop better budgeting or spending habits.
Consolidating Doesn’t Always Reduce Your Debt: Some consolidation strategies do not reduce the total amount you owe - you’re simply moving the debt to a new location. If you use a debt relief company to consolidate your debts, they may be able to help you reduce your total debt.
It’s common for your credit score to drop when you first start a plan for consolidation. When consolidating debt, your credit score can be negatively impacted by whichever program you choose to move forward with, whether it be a debt settlement program, debt consolidation loan or a credit card balance transfer.
However, acting responsibly within a debt program and practicing good financial habits, despite earlier setbacks, can lead many people to see their credit score eventually go up after consolidating debts. With the resolution of a debt consolidation program, a person’s credit score may increase over time thanks to consistent monthly payments and less credit being used as you pay down your debt.
To protect yourself from debt relief scams, work with a top-rated debt relief company that has experience helping people make efforts toward reducing debt. Most of the top debt relief companies have a large amount of positive online reviews from actual customers. This can help you verify the trustworthiness of a company.
At Accredited Debt Relief, we understand how overwhelming it is to be in debt, and our goal is to put your best interests first. We’re ready to review your unique financial situation and help you find the best debt relief solution.
You can get started with Accredited Debt Relief by applying online or calling us at (800) 497-1965. We’ll then put you in touch with one of our certified debt specialists, who will review your current financial situation and provide you with a specialized debt relief plan. If you stick with your tailor-made program, you can reduce your debt in as little as 12 to 48 months.
With an A+ rating from the BBB, we’re committed to helping customers with honesty and ethical business practices. Accredited Debt Relief is also an accredited member of the American Fair Credit Council (AFCC). Learn more about your debt relief and consolidation options by contacting Accredited Debt Relief today.