Do you pay monthly on multiple credit cards? Are you struggling to make payments on your personal or student loans? Is your medical debt piling up? Then you might want to consider debt consolidation. Debt consolidation is a debt management strategy where you take out a single loan and use it to pay off multiple forms of debt. That way you’re only making one monthly payment on debt with a better interest rate and lower overall monthly payments.
You can consolidate your debt through a variety of loan options. A debt consolidation loan is a good way to consolidate credit card debt or even personal loans or medical debt. Getting a balance transfer credit card is an option for credit card debt consolidation, too. There are many options that make easy debt consolidation possible, no matter the type or amount of debt you have. Continue reading this slideshow to learn more about debt consolidation and other strategies!
Before paying off your debt, it is a good idea to start financially planning. Financial planning is helpful so you can make sure you do not fall into further debt.
The first step in financial planning is to create a budget by looking at your expenses and income. The golden rule is: not to spend more than you earn.
Are there monthly expenses you can cut, at least temporarily? For instance, you can put monthly subscriptions to streaming services or subscription “boxes”, like for beauty and pet products, on hold. Even if they are not too expensive, cutting these small unnecessary expenses for a short duration can add up quickly. And, you can put these funds toward credit repair and debt reduction.
In fact, the best method is to stop using your credit cards altogether. Keeping your cards at home will make them less tempting to use while you are out. Stick to paying with cash or with your debit card until you have your finances under control.
Similarly, you can delete your credit card information from your online store accounts. Online shopping is risky if you are in debt, and removing the stored information can make you think twice about the purchase when you reach for your wallet.
By looking at your debt accounts and organizing them from the highest interest rate to the lowest, you can also set yourself up for financial responsibility.
For example, because high-interest debt can cost you more in the long run, you should prioritize those accounts and try to pay more than the minimum when you pay your monthly bill so you can get them paid back faster. Think of it as your very own form of credit monitoring.
Filing personal Bankruptcy Chapter 7 or 13 is also an option, but it might not be the best for you long-term as it can harm your credit score. Next, learn if filing for personal bankruptcy is a good option for you.