7 Incredible Benefits of Debt Consolidation

Are you drowning in debt payments?

Thankfully, there are myriad debt consolidation solutions designed to help you lower your interest rates and reduce your monthly obligations. 

Are you interested in pursuing this kind of financial relief for yourself?

If so, read on. Today, we’re sharing seven benefits of debt consolidation you can’t afford to miss!

1. A Path Toward Debt Repayment

Whether you pursue debt consolidation from a creditor or collection agency, your current debt situation will begin to look much different. 

In both cases, you’ll begin a new debt repayment plan that helps you take better control of your financial future. This new plan will feature smaller payments and lower interest rates to make each month more manageable.

This way, you can pay off your principal balance first, as well as some accrued interest. The best part? If you stick to the terms of the plan, you won’t default. You’ll be able to save money and take better control of your finances, one day at a time.

2. Lower Interest Rates

One of the top reasons that borrowers enter into a debt consolidation plan? To save money on their sky-high interest rates!

A debt consolidation company can negotiate with creditors on your behalf to achieve a more favorable rate. Then, they’ll restructure your routine payments to enable more successful debt consolidation. 

Let’s look at a real-life example.

Say you have two credit cards, with interest rates of 15% and 18% each. That means your average interest rate is 16.5%.

Then, you enter into a debt consolidation plan and those rates are lowered to 13% and 15%, respectively. Now, your average interest rate is 14%.

If you owe $3,000 on your credit cards, you just saved $75 per month. Here’s the math:

$3,000 x 16.5% = $495

$3,000 x 14% = $420

$495 – $420 = $75

3. Reduced Late Fees

Defaulting on a debt account can have a wide range of consequences, including late fees, penalty charges, and even more interest piled on top of your ever-growing balance. As you work to stay above water, these extra expenses can feel like incessant waves crashing on top of you.

When you work with a debt consolidation company, the new plan helps you reduce or even eliminate such charges. You’ll make one, timely payment a month, without worrying about any bills falling behind or getting lost in the shuffle.

This way, you can stay focused on paying down your balance, one month at a time.

4. One Comprehensive Payment

Are you tired of staring at a mountain of expenses at the end of every month? It’s no wonder two-thirds of Americans experience mild to severe anxiety when paying their bills.

With debt consolidation, you can roll all of those monthly payments into one, comprehensive statement.

You’ll send your single payment to the debt consolidation company. Then, they’ll divide and disperse the money among your various creditors for you. This way, you aren’t stuck organizing and keeping track of multiple bills, each with a different interest rate.

Especially if you aren’t great at keeping track of due dates and deadlines, this can be one of the top reasons to consolidate your debt today!

5. No More Calls

Chances are, you already know you’re behind on your payments.

You don’t need a collection agency pestering you with incessant phone calls all day long. You especially shouldn’t feel threatened by such contact, as one in four consumers admit to feeling.

Again, debt consolidation can save the day.

When you start a plan, you’ll sign a power of attorney as part of the onboarding process. Once you complete that step, those agencies and creditors will usually stop contacting you.

That’s because you’ve sent them a clear signal that you’re taking steps to pay down your debt and satisfy their requirements. If you’re tired of glancing at your phone with a pit in your stomach, this could be the change you need to silence those notifications once and for all.

6. Eliminate Debt Quicker

If you go the standard repayment route, you could be paying on your debt for years. Yet, if you commit to paying just a little more than the bare minimum required, you could be debt-free in considerably less time. 

One of the main goals of your debt consolidation agency is to help you eliminate debt as soon as possible.

To get there, your payment plans will be expedited so you can reclaim your financial footing sooner rather than later. In most cases, you can have your debts paid down in a matter of a few years, rather than waiting decades to breathe that sigh of relief.

Along the way, you’ll also have access to expert debt counseling services. A debt counselor can help you assess your situation and make wise steps moving forward. You can learn saving strategies and financial planning basics that can help you avoid this circumstance down the road.

7. Improve Your Credit

We know you’re more than a number. Still, it can be disheartening to see the negative impact that late payments and defaults can have on your credit score.

The good news?

You can begin reversing this pattern as soon as you enroll in a debt consolidation solutions and start paying off your accounts! While the change won’t happen overnight, it’s a major step in the right direction. 

Then, once you’ve completely paid off the accounts, the company can negotiate once again with your creditors. They’ll review your progress and encourage them to report your success, giving your credit score the much-needed bump it deserves.

Explore More Benefits of Debt Consolidation

If you’ve been considering debt consolidation at all, you’re likely overwhelmed with overdue, soaring payments and ready for a break.

We get it and we’re here to help.

Today, we’ve shared a few of the top benefits of debt consolidation, but the full list is much longer. As experts in this space, we’d love to match you with the platform that’s the best fit for your financial needs.

To get started, tell us a little more about your situation on this short form. We’ll review your information, display a range of appropriate debt consolidation offers, and allow you to choose the one you want, all in a matter of minutes.

Connect with us today, and let’s take that first step toward financial freedom together.

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