Improve Your Finances
Most of us have taken out credit over the years, in this day and age with the expense of every-day living it can sometimes be difficult not to.
Having debt hanging over you, however, can feel fairly deflating, especially if you’re finding it difficult to manage. You’ve likely considered how your debt will impact your financial future. Sometimes it can be hard to see your financial situation improving if you’re stuck in the cycle of paying minimum payments to cover interest and charges. Debt consolidation can be a great way to relieve some of the pressure and clear your debts more efficiently. Here are some ways that consolidating your debts can help you move forward and improve your financial future.
1. Makes budgeting simpler
Budgeting your money can be a challenge, especially when you have debts to pay. If you owe money to several different lenders then keeping on top of payment dates, charges and interest can get confusing. Simplifying your debts into one payment allows you to focus solely on paying one debt, making budgeting much more manageable.
2. Your payments will go further
If you are currently paying several different debts off each month then you are likely paying interest at a range of different rates. This can sometimes mean (especially if you’re paying the minimum payment), that your payments are mainly covering the interest that is accrued by the debt rather, than the debt itself. By paying off several debts with a consolidation loan, you only end up paying one payment each month, meaning your money will likely go further.
3. You’ll pay off your debts quicker
As your payments will go further and won’t be subject to various rates of interest and charges, you will likely pay off your debts quicker than you would by paying several creditors at a time. With a consolidation loan, you’ll know exactly when the debt will be paid off by planning your monthly payments accordingly and agreeing to a loan term that works around your current budget. Often, credit cards can take a long time to pay off because of the varying interest and charges and the fact that there is no fixed date for clearing the balance. This often means that you’ll be more likely to continue to use the card and keep adding to or “topping up” the balance again.