Being in constant debt can be quite overwhelming. As we approach the holiday period, the likelihood that the debts will increase becomes glaring. One of those things that the holiday season is known for is extra spending. So, consolidating your debts can help you stay on course and come out of debt.
Debt consolidation is simply a way of taking out a big loan with a lower interest rate to pay off other debts. With a debt consolidation in place, individuals will be able to not only pay off their debts but also save money from the lower interest rate.
Why Consolidate Debt during the Holiday Period?
While you can consolidate debt at any time you decide, doing so during the holiday period heightens the benefits that come from consolidation. What benefits can you derive from consolidating your debt?
#1. Lower Interest Rate
Many individuals who have been trapped in the debt quicksand find it difficult to clear their debt because of high-interest rates. Debts like payday loans and credit card debt are known to rack up to 20 percent interest or more. However, debt consolidation loans come at a lower interest rate making it easier to offset the other debts.
#2. Speeds Up Debt Payment
Consolidating your debt can help to speed up and actualize your debt repayment goals. Due to the high-interest rates that are associated with most payday loans and credit card debt, many people find it extremely difficult to pay off their debt. However, with a debt consolidation loan coming with a low-interest rate, the amount of money the debtor is expected to pay will decrease.
#3. Helps in Adhering to Repayment Plans
One of the reasons why people fail to pay off several debts is varied repayment dates. If an individual has debt from different sources such as payday loans, credit card debts, and others, the monthly repayment dates would differ based on the repayment plan in place.
With different repayment dates in place, it becomes almost impossible to meet up with all of them. However, debt consolidation is a game-changer. With a debt consolidation loan, the different payments are merged into one making it possible to effectively work towards repayment on the scheduled date.
#4. Saves you Embarrassment
Some creditors enlist the help of debt collectors to get back the money debtors owe them. These debt collectors most times employ different tactics in collecting the debts such as incessant calls and text messages to the debtor. However, with a debt consolidation loan, you can pay off every other debt and save yourself the stress of enduring the pressure from debt collectors.
Wrapping Up
While debt consolidation can help you get out of debt faster especially during the holiday period, it still boils down to what you want. Ensure you weigh your options and decide on what works best for you bearing in mind that the goal is to attain financial freedom.
