Debt consolidation is a debt management strategy where you combine multiple debts into a single payment. When you use this method, you may be able to simplify your payment schedule and get a lower interest rate than you’re currently paying on your debts.
Dealing with multiple personal debts might feel a lot like playing whack-a-mole – different bills with different due dates, minimum balances and late fines and penalties. Just when you’ve sent in one payment, another bill pops up. It’s easy to see how people get behind when repaying multiple debts overwhelms them. Debt consolidation can help by essentially rolling all your debt payments, like credit card bills, into one with a single due date and a fixed interest rate that is typically lower, depending on your credit score. Sounds easy right? While debt consolidation does provide a bevy of benefits, it does have its pitfalls if one isn’t careful.
If you owe more than $5,000 in credit card debt spread over many different cards, debt consolidation could make it easier for you to make a single payment each month instead of worrying about organizing your bills and paying each one on time. But don’t fret, we here at LynxFinancials got your back! Continue reading our guide on consolidating debt to learn the in’s and out’s of debt consolidation!