What Are The Benefits? | Debt Consolidation Part 2

A little bird told me

Debt consolidation can help you simplify.

I started thinking about debt consolidation after I read about it online. Here are the main reasons people get debt consolidation:

1. To save money by getting a lower interest rate
2. To lower monthly expenses
3. For convenience

Lower interest rate

The benefits of paying a lower interest rate are pretty obvious: it saves money. For instance, if you have several credit cards with 15 percent interest rates, and you can get a personal loan at 12 percent, you’ll save a bunch of money over time.

Of course, it isn’t usually that cut and dry. In my case, I don’t just have credit card bills. I have a bunch of different bills from different creditors, all with different interest rates. But more on that later.

Lower monthly expenses

You may be in a situation where you just can’t afford to make your minimum monthly payments on everything. Or you could be facing a creditor who is demanding a large sum right now or there will be severe penalties, such as wage garnishment.

If you find yourself having to choose between basic necessities, such as food, and getting in trouble with creditors, debt consolidation could help.

For convenience

I hate to tell you this, but purely for convenience is not a good reason to get debt consolidation. Sure, it’s your choice, but it is my professional duty to advise against it.

Yes, debt consolidation makes life a lot easier. It is extremely convenient. I am sure everyone would rather pay one bill each month instead of six. However, if you can afford your monthly bills and getting debt consolidation would raise your interest instead of lower it, you should probably just tough it out.