Debt consolidation rolls high-interest debts, such as credit card bills, into a single, lower-interest payment. It can reduce your total debt and reorganize it so you pay it off faster.
If you’re dealing with a manageable amount of debt and just want to reorganize multiple bills with different interest rates, payments and due dates, debt consolidation is a sound approach you can tackle on your own.
What is Debt Consolidation?
Debt consolidation involves combining multiple unsecured debts into one bill, which can be helpful if you’re overwhelmed by an assortment of monthly payments. You can consolidate a variety of debts, including credit cards, payday and personal loans, utility bills, and medical expenses.
So instead of having to send a separate payment to each creditor or collector every month, you’d make just one. This can help eliminate missed or late payments and ensure that you’re addressing all your debts.
Debt consolidation loans can be a great option, not only because it streamlines monthly payments, but also because, in many situations, you may get a reduced interest rate and lower total monthly payment.
There are many options to consider when deciding to consolidate your debt, some of which work better in different situations.
- Free up cash flow
- Consolidate monthly debts into one bill