Nothing is tougher than dealing with debt on a daily basis. Collection calls come at all times of day and night, the stress starts to build up, and it can be confusing to deal with what’s actually happening.
Consolidating your debt here may be one of the best ideas you have on the table – and could really help to change your life in a positive direction.
Here’s some of the reasons why a debt consolidation can take the pressure off and may make plain old financial sense, depending on your unique situations. As always, make sure you make decisions with your best interests in mind.If you’re reading this page, you’re already taking the first steps to improving your situation – great job so far. Keep going!
1) Easier to Manage
This is one of my favorite reasons for consolidating debt. When debt starts to snowball on you, it gets very frustrating.
Different collection agencies have different methods of contacting you, and the pressure starts to build and build.
If you’re in debt and having trouble, it may not always be due to simple financial problems. Sometimes figuring out what is going on is half the battle.
If you get your debt consolidated, that means all of your debt goes to one single central location. This is great because all of those payments go to one place – usually once or twice a month.
That immediately takes away one of the biggest pressures of being in debt, you don’t have to worry about sending out 5 or 8 or 10 payments to different places, you get one payment, one account, one auto-draft… etc.
This could also benefit you with missed payments if some are slipping by or any kind of overdraft fees if you have money problems building up.
All of this results in a process that is easier to control and gives you some breathing room so you don’t have to feel so overwhelmed all the time.
It also eliminates decisions about interest rates, deadlines, aggressiveness of collectors – all of that just fades right away. What an awesome benefit.
2) Stop Collection Activity
One of the absolute worst parts of being in debt is the collections activity. No one wants to deal with daily calls, letters, emails, and more from these people who seem like they’re hounding you for money. Your life can really become frustrating with this contact from people daily who have such an annoying process for getting what they need.
You don’t have to feel like a bad person to get out of debt, and here’s where debt consolidation shines.
If you’re late on certain payments, putting them into a consolidated loan would bring them current and up-to-date. Now you have one company to deal with and your payments will start off on time. Keep that account happy and you should eliminate any kind of collection calls entirely.
That puts you back in control of your life and won’t leave you scared to pick your phone. Eliminating that stress can even add to some work performance, leave you happier when talking to family and friends, it’s quite amazing what eliminating some small annoyances can do for you.
3) Get a Better Interest Rate
While the discussion so far has been a lot about mental benefits of debt consolidation, the math can work out well too.
Debt Consolidation can lead to lower interest rates a lot of the time. When you combine a lot of accounts into one, you could be reducing higher interest rates by a company that is eager to get rid of your debt.
On top of that, these collection companies do want to get paid as opposed to not paid, they have a big interest in working with you and making sure you’re in a situation that you can handle. I’m not saying they love charity, but each and every one of them will take getting paid over not getting paid – you can guarantee that.
The cheaper interest rates that you can get from consolidating will lead to less money paid over time, obviously, and while looking at debt consolidation can be good for the short-term effects, that’s another positive for your long-term situation as well.
4) Get A Credit Rating Boost
If you’re looking at debt consolidation, you may be having problems with your multiple debt accounts.If you’re having problems getting those people paid, you’re probably missing payments.
If you’re missing payments, you’re taking big hits to your credit rating and that can be detrimental to your long-term happiness.
Consolidating debt is one way to give yourself a credit boost in that regard. While your personal situation will affect exactly what will happen with your credit rating, eliminating missed payments is probably the #1 thing you can do to get your score up quickly.
The most important thing here is working with your new loan company where your one single payment is and making sure that you don’t miss any payments with them.
As with anything, don’t worry too much about what happened in your past – take control of what you can control and look to the future.
5) Reduce Fees
We already covered how you may get a lower interest rate, but you also have another mathematical advantage when consolidating debt.
If you have missed payments or overdrafts due to multiple debt accounts, you’re probably getting hit with some hefty fees.
Having one loan account will get rid of those pesky overdraft fees for accounts you forgot about – with only one focus you should be able to pay a lot of attention to your account at that time and take your fees down to zero.
Your life may feel like it’s out of control if you have multiple debt accounts, but consolidating your debt can lead to a lot of stress relief and a better feeling about your overall situation.
Debt consolidation gives you a much better control over your finances and lets you move in a positive direction with your life.