Updated: Mar 21, 2021
⚡THE POWER OF DEBT CONSOLIDATION⚡
Do you have student loan debt? Credit card debt? An auto loan with a higher interest rate? Have a balance(s) you've been trying to payoff but the interest just won't give you a break? Or do you have too many minimum credit card payments you're trying to make every month?
Why if I told you that you could potentially cut these payments in half or instead of having multiple monthly payments to different lenders, you could have just one?
What is debt consolidation?
Debt consolidation is a method that rolls multiple debts into one monthly payment.
Sally has a credit card with a 5k balance, another credit card with 7k and a student loan with 2k. She has 3 separate monthly payments equaling over $1000 because her interest rates are all over 20%. Sally decides to get a 14k personal loan with an interest rate of 13%. Not only does she cut her interest, she also only has one payment for all of this debt.
What are your options for debt consolidation?
1. 0% intro credit card- typically best for credit card debt. You can open a new credit card that offers a 0% intro period for balance transfers and move your money over from the higher interest rate card to the 0% card. (Most places offer a fee to do this, but there are a few that will let you do it for ftee- let me know if you'd like to know which ones!)
2. Personal loan- this option works for both credit card debt as well as any other debt. You get a loan with a fixed interest rate and fixed monthly payments until you pay the loan off.
3. Home equity line of credit- this is another great option for anyone who ownes a home. You can use the equity from your home to consolidate debt at a much lower interest rate than a credit card or personal loan.
You should only get a personal loan if it will help you. Not to pay off cards only to max them out again. Remember- the goal is to get out of debt, not to accrue more.
Want help deciding if consolidating debt makes sense for you? Not sure what your options are? Let me know!! I have some great resources to help you out 😊