Consolidating secured debt

“It can be really overwhelming when you have five credit cards to pay and you don’t even know where to start.I’ll sometimes float the idea of debt consolidation so they only have one bill to pay or so they can have a lower interest rate.” There are many options to consider when deciding to consolidate your debt, some of which work better in different situations.Above all, the approach has to match the need and the comfort level of the borrower.

You can consolidate most federal student loans with a Direct Consolidation Loan, which you can read more about here.This makes the most sense when the personal loan has a lower interest rate than you’ve got across your existing debts.For individuals with debt on several credit cards, it can make sense to transfer the balances over to the card with the lowest interest rate, creating one payment and lowering interest overall.Debt consolidation involves combining multiple unsecured debts into one bill, which can be helpful if you’re overwhelmed by an assortment of monthly payments.You can consolidate a variety of debts, including credit cards, payday and personal loans, utility bills and medical expenses.

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