As debt creeps up, it can be difficult to stay on top of multiple bills with mounting interest. It’s an effort to combine debts from several creditors, and then take out a single loan to pay them all, hopefully at a reduced interest rate and lower monthly payment. This is typically done by consumers trying to keep up with bills for multiple credit cards and other unsecured debts.
If you’re overwhelmed by the sheer volume of bills arriving at your home every month, debt consolidation may be the debt-relief program you need but only if you’re able to curb your enthusiasm for spending.
Credit cards are the source of most financial problems for consumers. The average family has credit cards and owes in credit card debt. Throw in bills for rent, cell phone, utilities and on and on, and that’s a lot of accounting to keep up with every month.
If you fall behind on one credit card, it can be an uphill struggle to catch up. When it reaches the point where you’re only making minimum payments on one or more of the bills, then it’s time to consider debt consolidation.
Through debt consolidation you’re simplifying the process of paying your bills. You make one payment to one lender with one deadline every month in place of multiple payments to multiple creditors with multiple deadlines.
Therefore when you examine each method it’s important to come up with the total cost of bill consolidation. The amount of time the process will take and what impact, if any, it will have on your credit score.