If you ever lie awake at night wondering how your finances got in such a bad shape, or if you ever find yourself avoiding your bank statement at all costs, you’re probably in a decent amount of debt. The average American household has nearly $16,000 in credit card debt, and over $100,000 in total debt. This means you’re definitely not alone.
Whether you’ve accumulated debt from loans, unforeseen emergencies, a lack of self-control, or some sort of mixture of each, it is never easy to see your paycheck drained by payments each month. So here’s to a brighter future. But first, make sure you’re ready. Any debt takes discipline and commitment to conquer. Consolidating your debt is just a tool to make it a bit easier.
First: Are you ready?
Consolidating your debt will not sweep it under a rug so you can go on your merry way. No, it is a way to make your plan to get debt-free a bit easier and more manageable. If you have a spending problem, no amount of organizing or strategizing will make your debt go away. Be prepared to sacrifice and commit, even when it’s hard. So, buckle your seat belt and get ready for the long journey to financial freedom. You won’t regret it. No one has ever regretted paying off debts.
If you think you’re ready to commit, here are the 4 major reasons why you should consolidate your debt.
1. Lower your interest rates
A huge great of consolidating your debt is lowering your interest rate. This saves you money over time. Since every credit card has different interest rates, you may be paying a lot more than you should. This can make you feel like you’re in a debt vortex. If your payments aren’t making a dent into your debt because of high interest rates, you’ll never feel like you are close to financial freedom.
2. Lower your monthly payments
This makes your debt more manageable and will hopefully relieve some of the stress. A single lower monthly payment gives you the freedom to use your money however it is most needed.
3. Simplify your finances
If you have debt with multiple creditors, it can be a hassle to keep track of each payment. You run the risk of making late payments or missing them completely. Having to deal with multiple creditors also adds the headache of juggling multiple interest rates.
4. Accelerate your payment plan
Debt can often take up to 20+ years to pay off. Paying month after month for years while also accumulating interest is frustrating and discouraging. Consolidate your debt into a single fixed payment plan and you’re one step closer to financial relief. You won’t be debt free instantly, but the light at the end of the tunnel will be much more tangible.