Jan 28, 2022 / Money Tips
At the beginning of the year, money is on nearly everyone’s mind. Whether you’re still recovering from the holidays, anticipating tax season, or just trying to follow through with your financial resolutions, matters of money have a way of adding extra stress to an already stressful time of year. If you’ve been looking for a better way to manage your financial burdens, a debt consolidation loan can help you save money, simplify life, and find peace of mind.
One of the best reasons to consolidate debt is to simplify overly complex financial situations. Even if you have just a few credit cards, each with a different lender, a different due date, a different interest rate, a different, well, you get the unnecessarily complicated financial picture. Combining all these debts into one single monthly payment with a single lender lets you focus your financial power, so you’re much less likely to miss due dates and incur interest charges. And, because you know exactly how much you have to set aside each month, you can simplify your overall financial plan with an emphasis on eliminating your debt once and for all.
A debt consolidation loan makes sense for a lot of reasons, but if you’re carrying balances on multiple high-interest rate credit cards, debt consolidation can save you a ton of money and help you pay off your debt faster. Your debt consolidation loan’s interest rate will likely be lower than the 20% or more you see with a lot of high-interest credit cards. And with more of your payment going toward your principal balance (thanks to your lower interest rate), you can potentially save money with each monthly payment and over the life of your loan.
Many credit cards come with annual fees, surprise fees, balance transfer fees, and that’s on top of an already high interest rate. The right debt consolidation loan can help you eliminate fees altogether, while also reducing your monthly interest payment. If you’re paying fees on top of fees with your current debt, a consolidation loan can help you take control with a more manageable monthly payment and no surprise fees to add to your financial stress.
While applying for a new loan won’t automatically improve your credit, the right loan with the right repayment plan can help you to eliminate debt and rebuild your credit over time. That’s because debt consolidation can reduce your overall credit utilization, which accounts for as much as 30% of your overall credit score. And, because your credit score takes type of debt and amounts owed into account, consolidating can help you reduce the number of high-balance credit cards on your credit history, which has the potential to improve your score.
If debt has you down, don’t stress. Think debt consolidation loan from Utah First. If you have questions about the best ways to reduce debt or you think debt consolidation might benefit you and your financial situation, give us a call or apply online.