Debt consolidation and consolidation advice is absolutely critical to your debt-management plan—because it isn’t for everybody.
Debt consolidation is a sensational idea for many, including those paying high interest rates across a myriad of debt sources, but a poor idea for those with lower interest rates but higher balances.
So…is consolidation right for you?
Consolidation Advice: Is Debt Consolidation a Good Idea for YOU?
There are a number of indicators that may be pointing you in the direction of debt consolidation. These include…
- You have high interest rates
- You have multiple sources of high-interest consumer debt
- Debt consolidation would lower your monthly payment while paying off a significantly larger percentage of the principal.
- It would empower you to pay down your debt quicker, or within a more reasonable timeframe.
- You have good credit that would allow you to quality for a debt-consolidation loan.
Most people who qualify for a debt-consolidation loan will take that route, for its principal-paying, interest-lowering advantages. Keep in mind however that a debt-consolidation loan isn’t the cure-all for debt. You are still required to pay off the same value of debt that you have now. Also, note that many people who consolidate their debt end up incurring their consumer debt all over again as after a consolidation they may end up spending more than the cash flow that the loan frees up—as it also frees up credit lines.
Debt consolidation should ideally be implemented into an existing debt- and cash-management plans that offer you long-term solutions to your debt situation.
Who Shouldn’t Use Debt Consolidation
As we said, not everyone should use debt consolidation as a debt-management strategy. Those who should opt for another strategy include:
- Your credit doesn’t qualify you for an additional loan.
- You have a low or spotty income.
- Your debt ratio is unmanageable, even with consolidation.
- You don’t have ways to manage your debt over the long-term.
If you are still unsure if debt consolidation is the route for you—call one of our debt-management experts here at Clear Debt for further consolidation advice. We can help you evaluate all your options and find the one that will get you out of debt quickly, reliably—and responsibly.