For many people, the answer is Yes. Debt consolidation can be a great way to simplify or lessen your financial burden. Here are a few ways:
- You will lower the amount you pay each month. When deciding what debts to consolidate, compare the annual percentage rate (APR) for each of your current credit card debts to the APR for your new debt consolidation loan. Consolidating high-interest-rate debts into a single lower interest rate loan will reduce your total monthly payment.
- You will pay off your debt sooner. By reducing the amount that you pay on interest, you will be out of debt more quickly, simply because the creditor is charging you less for the amount you borrowed.
- You won’t have to manage so many bill payments. By consolidating your debt into a single loan, you will make one simple monthly payment, rather than tracking the different “due by” dates for multiple bills to different creditors every month.
