Being in debt can be both hard on your wallet and your health, as the extra stress can wear you down. Eventually you may need to look to other options, and one of those options is debt consolidation, which can help you to both pay off the debt more easily and more quickly. To help you make an informed decision, and determine if debt consolidation is the right choice for you, please enjoy our list of the top 9 benefits of debt consolidation.

1. Lower Interest Rates
Paying several interest rates at once is going to get pricey, quick. However, when you consolidate your debt, you have one interest rate for all of your debt, which is usually much lower and much easier to manage. Interest rates alone have been known to keep some people in debt all their lives.

2. Timely Bill Payment
Having one loan to pay back instead of several also makes it much easier to pay on time. It’s easy to miss a bill when you have a whole stack to pay off, but being able to make one monthly payment will make the job easier.

3. Avoid Bankruptcy
Bankruptcy is often a last resort for many people who struggle with their finances. However, with debt consolidation you are much less likely to need to resort to it. When you have fewer loans to pay off, you’re also much less likely to acquire additional new loans, thus much less likely to have the need to file for bankruptcy.

4. Longer Repayment
Sometimes debt consolidation will lead you to receiving a longer payment period. This will give you more time to get your finances together and make paying off the debt both feasible and comfortable.

5. Easier Borrowing
If you have to take out another loan in the future, then you are in luck because debt consolidation will make your approval more likely. Lenders are more likely to lend to you if you have less debt, and your credit score should be higher after debt consolidation as well.

6. Won’t be in Trouble
Getting a call (or dozens of calls) from creditors is both annoying and embarrassing. However, debt consolidation can help get you off of the creditors list and on to the path of financial freedom. Then, you will finally be able to plug your phone back in.

7. Better Credit Rating
Once you consolidate your debt and begin to pay it off all together, your credit score is likely to improve. By making payments on time, and avoiding new credit cards, your credit score can increase and an improved credit rating can open up all kinds of new opportunities.

8. Lower Payments
Even if your total debt is not reduced, by consolidating your debts the payments should go down quite a bit. This is another factor that should help get you out of debt in the long run, as it will give you more cash to put towards your other expenses.

9. Debt Free Faster
Perhaps the best benefit of credit counseling is being able to get out of debt and on with your life faster. The feeling of paying off that last cent compares to no other, and you will be glad to know you made the right choice in consolidating your debt.

Tags: credit advice, credit card debt, debt consolidation, financial advice, interest rates

This entry was posted on Monday, December 22nd, 2008 at 11:14 am and is filed under Debt Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.