Outstanding debt from several high interest credit cards, less than stellar financing terms on your auto loan, and too many bills in general, can create an overwhelming amount of stress surrounding your finances. If there’s no end in sight for your debt and paying off loan balances seems almost unattainable, you might be a great candidate for a debt consolidation loan.
Consolidating your debt into a lower rate home equity loan, personal loan, or low fixed rate credit card can streamline your debt into one easy payment, pay off your debt earlier, free up some extra money, or offer you the chance to apply additional savings towards the principal of other outstanding balances. Here are some telltale signs that it may be time to pay off those balances once and for all.
Signs You Need to Consolidate Debt Before More Damage Is Done
1. Your Paycheck Runs Out Before Your Bills Do
When you have multiple high-interest loans, the monthly payments can really add up. In fact, many consumers report being short each month when it’s time to pay bills. If you notice your paycheck is accounted for in full before it even arrives, it’s time to consider debt consolidation.
2. You Regularly Forget to Pay a Bill Each Month
When you have so many bills to pay each month, it can be overwhelming. Remembering to pay them all on time each month is a task in itself and missing payments leads to issues with your credit score. If you notice yourself missing a payment or two, it’s time to streamline your outstanding debt into one easy-to-remember payment.
Reveal tips to get out of debt fast while exposing unrealistic expectations by downloading our guide:
3. You Have Multiple Monthly Loan & Credit Card Payments
Not only can multiple monthly loan payments wreak havoc on your budget, the interest can really add up. If you have multiple major loan payments due monthly, you should consider the benefits that debt consolidation can offer. Save money on interest, shorten your loan terms, pay off your debt faster, and save more money by applying for a home equity loan, personal loan, or low rate credit card to consolidate your debt today.
4. You're Only Paying the Minimum Amount Due
Paying the minimum amount due on your credit cards each month will get you nowhere...or at least it will feel like it. Making just the minimum monthly payment each month can actually result in it taking several years to pay off credit card balances. This also leads to paying added interest by extending the length of time you hold a balance. If you can only afford the minimum monthly credit card payment, it may be time to consider a debt consolidation loan.
5. Your Debts Are Incurring High Interest Rates
When you have a high interest rate on any type of loan, you could be paying too much for the money you borrowed. Excessive rates can make it difficult to reach your financial goal of being debt free. Use a reputable debt consolidation calculator to see your potential savings and shortened loan terms by consolidating your debt today.
How to Tell if You're Ready to Consolidate Debt
Although consolidating debt saves many consumers from having to pay several high interest bills while benefiting from additional savings and possibly shortened loan repayment times, it may not be for everyone.
Before consolidating your debt with a home equity loan, personal loan, or low rate credit card from a trusted local lender, be sure you do your research to determine if it's the right choice for your financial situation.
Before applying, check your credit score and ensure any errors have been corrected and fixed. The better your credit rating when you apply for your debt consolidation loan, the better potential interest rate you'll receive. Also, make sure that once you receive your money to pay off your debt, you follow through with your debt payoff, and have a new spending and budget plan in place so that you don’t end up in a similar situation in the future.
If you're ready to consolidate your debt or have questions about Peach State’s debt consolidation solutions, please contact a Peach State Lending Specialist today!
If you're ready to consolidate debt but would like more tips on the available solutions, review our Debt Consolidation: Expectations vs Reality Guide.
