Have you accumulated credit card debt over the years? Perhaps it seems impossible to repay after multiple years of being caught up in the debt cycle. However, what if we told you there was an easy solution? Presenting loan consolidation, a solution that has helped many people leap out of their financial crisis.
The tips discussed in this article can assist you with the management of credit card debt and understand the pros of credit card loan consolidation. In short, it can help you understand that one loan is much easier to repay instead of managing multiple loans!
How Do I Consolidate Credit Card Debt?
Wondering how you can consolidate your credit card debt? There’s an easy solution:
You can now opt for loan consolidation through a variety of methods, including personal loans, debt consolidation programs, and 0% APR credit cards!
1. Personal Loans
Personal loans provide you with the easiest path to credit card loan consolidation. All you need to do is reach out to a local bank or credit union and apply for a personal loan. Although the process may be a bit more complicated than an online loan, it will ultimately be worth it.
The application can be submitted online too! In just a few days, your credit history will have to undergo a hard inquiry which may lead to a dip. Don’t be alarmed! It is quite easy to regain those points.
Personal loans allow you to rely on longer loan terms and pay for just one loan instead of many.
2. Debt Consolidation Programs
One way to repay a loan might be to take a personal loan and pay back all of the individual loans just to repay the current loan amount over the next few years. Another way is to opt for credit card debt consolidation programs.
This is whereby all your credit card debts are combined into a single debt. From here onwards, you make a single payment for your debt, which is used to pay off your lenders one by one.
3. 0% APR Credit Cards
Not all credit cards come with an APR. Some offer a 0% introductory APR on balance transfers, meaning that you will not be charged any additional interest even if you have a balance accrued.
Why Credit Card Debt Consolidation is a Great Idea
Here are all the reasons credit card debt consolidation is a great idea;
1. Easier Management
Credit card debt consolidation can help you get a grip on your finances. You don’t have to keep up with multiple debts anymore. You can simply add those debts into one loan, reducing the payments you must make and the interest rates you worry about.
Moreover, the lesser the number of loans, the less likely you are to miss payments. This helps you avoid fees and the worry attached to always remembering loan repayment deadlines.
2. Better Credit Score
Since a consolidated loan will have much less accrued interest than the other loans, you will be able to pay it off a lot quicker. You can also make repayments a lot more often, which positively impacts your credit score.
You can also save a lot on interest in the long run. Over time, these savings can be used to pay off even more debt and escape the cycle altogether.
3. More Space for Your Dreams
A consolidated loan is much less expensive than others. When you consider consolidating your credit card debt, and receive approval, you are going to have to pay much less for the debt than otherwise. This means you have more money left over which you can use to save, buy a car, invest in a mortgage, or any other dream you may have.
Tips for Managing Credit Card Debt
Here are some tips you can use to manage your credit card debt;
1. Time Management
Master time management and set reminders that can help you pay back on time. The more time you take to repay, the more delays are possible. It is important to pay the minimum installment that is required of you to escape any penalties that can be applied.
Missing a payment by more than two months could negatively impact your credit score. Your credit history will eventually determine whether you get better terms or not the next time you apply for a loan.
Try not to juggle too many credit card debts at one time. Plan your debt, and don’t bite off more than you can chew. If you cannot manage your finances, perhaps it is time to consult a professional who can provide you with financial literacy.
2. Speak to a Professional
Professionals like Solid Ground Financial don’t just evaluate your history with credit card debt but also your current financial situation. They can help you determine whether you should go for loan consolidation, how you should get out of debt, and how you can negotiate for a lower interest rate.
You must speak with your creditors or let your advisor speak on your behalf to get better terms and interest rates. This helps you repay your loans earlier.
3. Baby Steps
Try to take baby steps when entering the credit card debt consolidation world. Don’t take in everything at once, and do not accumulate more than one loan. Instead, implement a strategy that is going to work for you in the long run.
Try to focus on paying off the debt with the highest APR first and foremost. Plan ahead and calculate all your loan amounts, understanding whether you have space to consolidate all of them. If you think it is going to take much more than your budget, look for an alternate plan.
Final Thoughts
Credit card debt is often difficult to handle especially when it has accumulated over time. It is even harder to juggle multiple loans when you don’t have the means to pay one. However, it is important to trust a professional, such as Solid Ground Financial, to guide you through the process and help you understand all the benefits of consolidation.
With credit card debt consolidation, you can escape the vicious debt cycle and come out debt-free on the other end!
