Debt is a stressful situation no doubt. It puts pressure among members of the family as living expenses are stretched to the limit. If you are one of the millions of Americans that are in debt, there is a way by which you can get out of it and that is through debt consolidation. Here are some helpful tips on how to use debt consolidation as a means to get out of debt.
Curious What Debt Consolidation is Exactly?
To consolidate or to combine several unsecured debts such as personal loans, credit card debt, medical bills, payday loans and more into just one bill. As opposed to having to write checks for several creditors each month you consolidate all the bills into one payment and therefore write only one check. With this approach you avoid mistakes like penalties and late payments or incorrect amounts as you only need to remember just one.
Types of Debt Consolidation
There are 3 major kinds of debt consolidation and these are debt management plans, debt consolidation loans and debt settlement. It is important to note that debt consolidation is not meant to be a quick fix to your debt problems but rather a long-term financial strategy with the goal of getting you out of debt.
Advantages of Debt Consolidation
When you consolidate your debt you:
Lower interest rates – means lesser money you owe that accrues over time.
Lower monthly payments – the debt is stretched out over a certain period to allow for low monthly payments.
Credit Score Protection – Since you are not defaulting on any of your financial obligations and are paying your debt, you are able to safeguard your credit score.
Get out of Debt Faster – the goal of debt consolidation ultimately is to get you out of debt quickly.
Best Approach to Consolidate Debt under $3k
Depending on how much you owe, there are several means by which you can consolidate your debt. A quick way to consolidate debt under three thousand dollars for instance is to use a zero-percent interest credit card and transfer your balance from your other cards to it. A personal loan to pay you other balances could also do the trick.
Debt consolidation allows you to put all your debts in one basket so you just pay one bill and not several. While it is not a quick fix to your debt problems it does put you one the right path to slowly get out of the vicious cycle of debt and loans.
We would like to send a special thanks to Consumer Credit of Minnesota for their expert information. You can’t go wrong by putting your trust in their Debt Consolidation program. Also check out their site for financial education and other credit counseling services. They are the experts and have helped 10’s of thousands of people get out of debt and their financial health back on track.