Debt is something that needs to be taken care of as soon as possible. According to the New York Federal Reserve, the American consumer debt (mortgages, car loans, credit cards, and student loans) reached $14.64 trillion in the first quarter of 2021. Now that’s the kind of number you just can’t overlook.
Some, or should we say most Americans are unable to manage the thousands of dollars they have hanging around their neck. It has forced them to explore other options that would show them a way out.
In come the credit card consolidation services. For those who don’t know, these services are considered to be live savers as they help people pay multiple debts and combine those monthly payments into one.
What is Debt Consolidation?
As the name suggests, debt consolidation is the process of combining two or more debts into one single larger debt. These services are generally taken by those who are burdened with high-interest debts.
Additionally, to simplify your finances, debt consolidation gives the borrower more favorable loan terms, such as a more competitive interest rate.
What Makes Debt Consolidation A Service To Check Out
- Helps you repay debt sooner
Taking a debt consolidation loan can put you on a faster track to total payoff. It comes in handy if you have significant credit card debt lying around. For those who don’t know, credit cards don’t have a set timeline for paying off a balance, but a consolidation loan, on the other hand, has fixed payments set for every month.
- Simplifies finances
Choosing credit card consolidation services means you are actually setting yourself free from worrying about multiple due dates each month because now you’ll have only one payment. Furthermore, the payment is the same amount each month, so you know exactly how much money to set aside every time.
- Get lower interest rates
As of July 2021, the average credit card rate ranges around 16 percent. While the average personal loan rate lies below 11 percent. Considering the fact that these rates vary and depend on your credit score, the loan amount, and the term length, you’re likely to get a lower interest rate with a debt consolidation loan than what you’re currently paying on your credit card.
- Have a fixed repayment schedule
If you choose to use a personal loan to pay off the debt, you’ll get an idea about how much is due each month and when your last payment will be. It is recommended that you pay only the minimum with a high-interest credit card, and it could be years before you pay it off in full.
In the End
You may not realize it, but credit debt counseling services are lifesavers. So, if you happen to have massive debts lying around, this might be the right time to use these services and get yourself out of this mess.
