Debt Consolidation Helps You Take Control
Lower your monthly payments and cut your interest rates to save money.
When you overcharge or rely too much on your credit cards to cover shortfalls in your budget, your monthly debt payments can become more than you can manage. Debt consolidation is one option you can use to regain control. The faster you act, the more likely you are to avoid things like bankruptcy and severe credit damage caused by missed payments and collections.
The resources in this section are designed to help you understand what consolidation is and how you can use it to get ahead when you start to fall behind. If you have questions or need help, call us at or get started now with our free Online Application.
What is debt consolidation?
Consolidation is the process of combining multiple debts at the lowest possible interest rate. Instead of paying several different accounts every month, you only have to worry about one. At the same time, because the interest is lower, your debt doesn’t grow as fast AND more of each payment you make goes to paying off the principal (original debt owed) versus the interest accrued every month.
How does it work?
There are a few different ways to consolidate credit card debt. The method you choose is really dependent on your credit score and your personal preferences.
- If you have good credit, then you can use do-it-yourself debt consolidation options, including a balance transfer and a personal unsecured debt consolidation loan.
- If your credit is not the best (or if you’ve had past credit mistakes), it’s likely you won’t qualify for do-it-yourself options. If you want to consolidate you’ll need to go through credit counseling and consolidate using a debt management program.
No matter which option you choose, the process works in much the same way. Instead of multiple debt payments each month, you only have one payment to worry about. Your goal should always be to get the lowest interest rate possible.
Are there any risks when you consolidate debt?
In most cases, as long as you consolidate your debt in the way that’s right for your situation, there is very little risk and you have a lot to gain. You just have to make sure you’re using the right option for your unique financial circumstances.
Of course, if you use the wrong option, then you could be looking at actually increasing your monthly payments or paying more in added interest before the debt is paid off. In addition, if you don’t complete your plan correctly and make all the payments on time, it could damage your credit.
But again, you don’t have to worry about any of that as long as you have the right consolidation program for your situation. The payments should be manageable for your budget and as long as you stick with your payment plan, you shouldn’t have any trouble.
The final risk you have to worry about when you consolidate is whether the company you’re working with is a legitimate debt relief service or really just a scammer trying to make a quick buck. While most debt consolidation help is legit, there are agencies out there that prey on people stuck in a bad situation and desperate for help. Just make sure to vet any debt consolidation companies thoroughly before you sign up for any program. Always know what you’re getting into.
Additional topics of interest
As you can see, there isn’t just one right way to consolidate, and you can accomplish a lot using the right option for your unique situation. The following resources can help you better understand specialized types of consolidation that may work for you, depending on your situation. If you’re in doubt or have questions, just call us to talk to a certified credit counselor so you can get a more personalized perspective.
- Military Debt Consolidation. If you’re a service member, veteran or military family then you may have special options to consider if you need to consolidate debt. The process still works in the same way, but you can take advantage of military discounts and VA loans to reduce costs as you eliminate debt. We help you understand how consolidation differs in your situation.
- Medical Debt Consolidation. If you have unpaid medical bills that weren’t covered by your insurance and you’re facing the threat of collections, debt consolidation may be able to help you pay off those debts – but only if your circumstances are right for it. Learn when medical debt can and can’t be consolidated so you can better understand the options that may help you out of debt.
- Payday Loans & Debt Consolidation. If you’ve taken out payday loans as you’ve struggled to stay ahead, you may be stuck with high interest rates and what seem like a never-ending series of automatic payment withdrawals from your bank account. Learn how consolidation may be able to help solve your issues with payday loans so you can regain control.
If you’re in doubt about consolidation…
If you’re considering consolidation, but want to make sure you’re choosing the right option for your situation, call us today. A certified credit counselor will evaluate your situation for free and help you identify which options will work for you. To get started, call or request for a free Debt & Budget Analysis online now.