Do you have a lot of outstanding debt? In some cases, people can juggle multiple credit cards and other credit balances with no issues. However for some people, it can be a tough time trying to keep up with several debts spread across different credit cards or loans.
If you fall under the latter category, you may be wondering if there is anything that can help your situation.
Debt consolidation is one option to consider.
If you are struggling to manage different types of debt, then a debt consolidation loan could bring everything under one umbrella, and help you to pay it off quicker.
Here are five reasons why debt consolidation may be your best solution:
1. The interest rates on your various debts are very high
It will take you a long time to pay off your debts if you’re faced with interest rates that are sky high. Debt consolidation loans could offer a way out by transferring all your various balances onto one, much lower rate. This can make your debt much more manageable and help you to pay it off faster.
2. You’re losing track of all your various repayment dates
You may think that missing a debt payment here and there isn’t too bad as long as you pay it off eventually. But it’s actually really harmful to your financial reputation and could affect your ability to get credit in the future.
If you miss a debt payment, it will show up on your credit report. These ‘blemishes’ on your report will be visible to lenders so if you’re hoping to get a mortgage or any other form of credit, it’s best to avoid these mistakes.
It can be difficult keeping up with debt payments, if you’re making multiple payments to different creditors each month. Replacing your debts with one simple debt consolidation loan can make life a lot simpler, with just one date to remember.
3. Your credit score has dropped due to increasing debt
As mentioned above, missed payments can impact your credit score. But so can carrying around a lot of debt at once. If you’ve maxed out all of your credit cards, and are struggling to pay them off, your credit report is going to suffer.
A debt consolidation loan will bring down your credit usage – giving you just one debt as opposed to lots of smaller ones. Settling this debt will have a positive impact on your credit score. Debt consolidation can make it much more manageable to pay off – over the long term this should help you to improve your credit score.
4. Too many debts are making you stressed
Don’t we all have enough stress in our lives without the worry of debts hanging over us. If you’re constantly juggling debt payments and ensuring they are made on time, then it’s time to look at ways of easing this pressure.
Debt is one of the most common causes of stress and mental health problem. Finding the right solution to your financial problems can also beneficial to your health. By consolidating your debt into an easier to manage payment, and paying it off quicker, could take a huge weight off your mind.
If debt is seriously impacting your mental health, please speak to someone who can help. Some people may be embarrassed by debt problems, but speaking to someone could stop the situation from spiralling out of control.
5. You’re struggling to imagine a way out
With debts hanging over you, it can often seem like there is no end in sight. It’s a common feeling shared by many in the same situation, and can be extremely debilitating.
Debt won’t go on forever – you can get out of it. But there are smart ways of doing so.
A debt consolidation loan, may at first thought, seem like a futile measure. Taking on more debt to get out of debt? But consolidating your debts into one easy to manage payment can actually give you that light at the end of the tunnel.
Should I consider Debt Consolidation?
If you relate to any of the reasons above, then it’s certainly worth checking out your debt consolidation options.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.