Nowadays, trying to pay off your debt can be overwhelming, but there are ways that you can solve your problem, and one of them is by consolidating your debt. What is the best way to consolidate debt, you may be wondering?
We’re here to answer your question by providing some of the top ways to consolidate your debt and relieve some of the stress that you’ve been feeling when it comes to your finances. It’s time to stop worrying and start planning for your future.
Don’t wait to continue reading this article and then select the debt consolidation option that will work the best for you.
1. Get a Personal Loan
One of the first ways that we’re going to discuss when it comes to debt consolidation methods is the personal loan. When you get a personal loan, you can take all of the debt that you have outstanding currently and combine them.
After combining them, you’ll be given a new monthly payment that is lower than what your individual payments would’ve been. One of the significant benefits of having a personal loan is that you don’t have to worry about changing your interest rate.
When you accept the loan, you’ll be given a fixed interest rate, and it will remain that way until you’ve paid off your debts. There are times when life can get tough, and you won’t be able to make your payments on time, which can cause you to look over your shoulder for the repo-man.
But, with personal loans, that’s something that doesn’t happen. Your personal items won’t be taken away because you fail to make a payment. With that being said, we recommend that you make your payments on time because, after all, you’re trying to get out of debt.
When you’ve taken out a personal loan, you’ll often find that you can get it paid off quicker than if you were to leave your debts separately. This means more money for you to dedicate to other things.
2. Balance Transfers
The way that a balance transfer works is taking the current balance on all of your credit cards and transfer them all to one card. Before you transfer the existing amounts, ensure that you transfer them to the card with the lowest fixed interest rate.
The last thing you want to do is perform a balance transfer and then end up paying more because the interest rate of that card was higher than you remembered. Be aware that if you sign up for a card that has a 0% interest rate, it will only stay that way for a short amount of time.
For some people, that serves as a challenge to get their debt paid down before the period is over. Performing a balance transfer to consolidate debt is convenient because once you transfer all of the debts to one card, you can then set that card to auto-pay.
Once the card is set to autopay, you can guarantee that a little bit of the debt will get paid off each month without you having to think about it. Before you can choose the balance transfer as a debt consolidation option, ensure that you’ve been approved for a higher credit limit.
You don’t want to load one card with debt that’s going to bring your credit score down because it wasn’t equipped to handle all of your debts on one card.
3. Payment Plan
Another debt consolidation option that you’ve got is to do it the old fashioned way and use a payment plan. You’ll work with an agency that will help you set up a monthly amount that you’ll pay until your debts have been paid.
The difference between this option and the others is you won’t be given a loan to pay off your debts. You’ll have to work, and the money that you gain from your monthly income will go towards your debt repayment plan.
Now, for those looking to be able to live somewhat comfortably, this option may not benefit you. For others that don’t mind keeping a tight rein on their finances for a while, this option may be the best one.
Another benefit with this option is you won’t continue to be hassled by debt collection agencies, which can be tiring dodging the continuous phone calls that they make to people with outstanding debts.
Why Debt Consolidation?
Debt consolidation is a way for people to take back control of their finances and rid themselves of debt without having to continue to worry about paying it off. The valuable lesson that debt consolidation teaches people that seek to use it is financial responsibility.
No one wants to take their hard-earned money and give it to lenders or bankers. The best way to not have to do things like that is to manage your money wisely. Take care of your finances early, and you’ll experience a healthier financial future.
What is the Best Way to Consolidate Debt?
When it comes to what is the best way to consolidate debt, you’ve got to consider the options above. They offer fixed interest rates and one monthly payment to make it easier to reduce your debt balance.
If you’re looking for a debt relief counselor, get in contact with one of the representatives at National Financial Relief. We can provide you with the knowledge that you need to become debt-free.
And the best part about it is you don’t have to consider things like bankruptcy to do it. Don’t waste any more time; we’re waiting to chat with you about ways to relieve you from debt.