debt consolidation -
how much will you save?
Debt consolidation can be the relief you’ve been seeking, lifting the heavy burden of financial stress off your shoulders. Debt consolidation is a financial strategy. It means getting a new loan to pay off several existing debts.
Example Savings:
| Debt Type | Balance | Payment | Interest |
|---|---|---|---|
| VISA | $10,000.00 | $166.58 | 19.99% |
| MASTERCARD | $16,000.00 | $266.53 | 19.99% |
| LINE OF CREDIT | $25,000.00 | $281.25 | 13.50% |
| PAY DAY LOAN | $4,500.00 | $433.12 | 32.00% |
| Total | $55,500.00 | 1,147.48 |
| ECHO LOAN | $55,500.00 | $415.79 | 8.99% |
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This process lets you combine different high-interest debts. These can include credit card balances, personal loans, and other bills all combined into one simple loan.
The primary goal of debt consolidation is to simplify your financial situation. You will no longer have to manage many payments with different due dates and interest rates. You will only need to focus on one monthly payment. This can make managing your finances much easier.
It can help you avoid missed payments. Missing payments can lead to extra fees and hurt your credit score.
One of the key benefits of debt consolidation is the potential for lower interest rates. Many people discover that by combining their debts, they can get a loan with a lower interest rate.
This rate is often better than what they paid on their individual debts before. This can lead to substantial savings over time. More of your monthly payment will go toward paying down the principal balance instead of interest.
Additionally, debt consolidation can provide a clearer path to becoming debt-free. With a structured repayment plan, you can set a timeline for when you expect to pay off your debt entirely. This can be incredibly motivating and help you stay on track with your financial goals.
However, it’s important to approach debt consolidation with caution. While it can be a powerful tool for managing debt, it is not a one-size-fits-all solution. Looking closely at your financial situation is important. This includes your income, expenses, and total debt.
Do this before deciding if debt consolidation is the right choice for you. Consulting with a financial advisor or credit counselor can provide valuable insights and help you make an informed decision.
In summary, debt consolidation can serve as a much-needed relief from the pressures of multiple debts. By combining your high-interest debts into one loan, you can make managing your money easier. This may lower your interest rates and help you reach financial freedom.
You can free up more cash each month while paying down your debt quicker with a lower interest rate, and under a more manageable term. Take advantage of our debt consolidation calculator to begin your journey to financial freedom.
Different ways to consolidate your debt would be:
- Refinancing
- Home Equity Loan
- HELOC