Do you have a whole lot of outstanding debt hanging over your head right now? You’re definitely not alone!
The average American debt has topped $50,000 in recent years. And it’s not uncommon at all for people to have even more debt than that thanks to things like student loans.
If you want to begin working on getting rid of your outstanding debt, taking out a debt consolidation loan could be a great financial experience for you. It’ll make it possible for you to pay down your debt while practicing good money management.
Today, we’re going to discuss a few of the most undeniable benefits of consolidating outstanding debt. It should help to show you why debt consolidation is a better option than, say, debt settlement in the grand scheme of things.
Find out more about the top benefits of consolidating outstanding debt below.
It Makes Your Outstanding Debt More Manageable
If you have a lot of outstanding debt right now, there is a good chance that you have many different forms of debt. You might have:
- Credit card debt
- Personal loan debt
- Student loan debt
As a result of this, you probably feel overwhelmed by your outstanding debt. It can be really difficult for people to get a handle on debt when it’s spread out all over the place.
By getting your hands on a debt consolidation loan by Plenti, you’ll be able to throw all your debt into one big pile as opposed to dealing with it in different forms. It’ll make wrapping your head around how much debt you have more manageable for you.
It Prevents Late Payments on Your Outstanding Debt
When you have several different types of debt to your name, you’re going to have to make monthly payments on each individual one. This will inevitably lead to you making late payments on your debt every so often.
These late payments will have a negative impact on your credit report in many cases. They’ll also obviously add to your debt and make it even harder for you to bring your total outstanding debt down.
Consolidating your debt will make it so that you only have to make one monthly payment to keep your debt under control. It’ll do away with late payments once and for all and reduce your stress levels dramatically.
It Slashes the Interest Rates on Your Outstanding Debt
One of the biggest reasons why people struggle to pay down outstanding debt is because it often has high interest rates attached to it. These interest rates can make it almost impossible for some people to put a dent into their debt.
You should take a look at the interest rates attached to the different types of debt that you have at the moment. If they’re on the higher side, you can likely slash them by consolidating your debt.
When you go from having an interest rate that sits at 20% or higher on a credit card to an interest rate that is under 10% on a debt consolidation loan, it’ll make a huge difference. You’re going to cut your monthly payments down to size.
It Helps You Pay Off Outstanding Debt in a Timely Fashion
Do you have any idea how long it’s going to take you to repay something like credit card debt if you make just the minimum payments on it every month? We hate to be the bearer of bad news, but you could be repaying that debt for upwards of 20 years in some instances!
This is not ideal at all. You want to be able to pay off your outstanding debt way faster than that.
Consolidating your outstanding debt is going to give you an opportunity to do it. Rather than spending the next two decades paying off your debt, you should be able to get it knocked out in just a few years at most.
You should also get more say in how long you want to take to pay off debt. Most debt consolidation companies will provide you with a chance to pick how many years you want to spend repaying outstanding debt.
It Gives You More Hope in Your Ability to Eliminate Outstanding Debt
Do you want to know why so many people are walking around with so much debt to their names?
Yes, it is at least partly because many people try to live way above their means nowadays. It’s also, at least partly, because people don’t appear to be making smart budgeting moves.
But in addition to all that, people are also drowning in debt these days because they simply don’t have a lot of hope for their financial futures. They’re in so much debt that they just assume they’re never going to get out of debt, and therefore keep adding to it.
By consolidating your outstanding debt, you can break out of this vicious cycle. You’ll begin to feel a lot more hopeful about the future, especially when you can imagine a life without any debt in it.
It Stops Outstanding Debt From Taking a Toll on Your Credit Score
Have you pretty much stopped checking your credit report and credit score at this point because you’re afraid of what you’re going to find? This is not a good sign!
More often than not, this means that outstanding debt has wreaked havoc on your credit report as a whole. Your credit score could very well be in the tank as a result of all the debt that you have taken on.
There are lots of different tricks that you can use to bring your credit score back up again. For example, doing something as simple as disputing errors on your credit report might work wonders for your credit score.
But the easiest way to increase your credit score in a short period of time is by paying down any outstanding debt that you have. Once your individual debts have been paid off with a debt consolidation loan, your credit utilization will go down and send your credit score skyrocketing.
You will, of course, need to work to keep your credit utilization low if you want to maintain a high credit score. But you’re going to be amazed by what a big difference paying down your debt makes when it comes to your credit score.
It Makes It Possible for You to Lead a Much Better Life
In this day and age, Americans have more than enough things to stress out about. Some of the most common daily stressors include:
- Family life
- Home maintenance
The current political climate in the country and the COVID-19 pandemic have also stressed people out beyond belief over the last few years.
But if you ask almost anyone, they’ll tell you that their biggest source of stress is money. Or more specifically, the lack of money that makes it so hard for so many Americans to live their best lives.
If you’re someone who is constantly stressed out about not having enough money, paying off outstanding debt is one way to essentially give yourself a raise. When you don’t have debt payments every month, it’ll put more money into your bank account.
It’ll also open up so many new and exciting opportunities for you. When you’re keeping more money to yourself, you’ll be able to:
- Buy your dream house
- Invest in college funds for your kids
- Purchase the car you’ve had your eye on
- Start your own business
- Save up more money for retirement
The possibilities are virtually endless!
But before you can even think about doing any of these things, you’ll need to let go of your outstanding debt. And that all starts with consolidating your debt and then working to pay it down.
You’re not necessarily going to be able to reach your financial goals in a month, a year, or even several years. But as long as you consolidate your debt and stick to your debt repayment plan, it should pay off in the end.
Don’t Let Outstanding Debt Drag You Down Anymore
Are you sick and tired of spending almost all your money on paying down outstanding debt? If you are, consolidating your debt could be the answer to all your prayers.
As you’ve seen here, you should be able to make your debt more manageable and attack it more effectively with a debt consolidation loan. You should also give yourself a much better financial future when you don’t always have debt dragging you down.
Start your search for a debt consolidation loan today and take advantage of everything it has to offer. You’ll wonder why you didn’t decide to take one out sooner once you see how helpful it can be.
Want to get more personal finance tips that will help you make outstanding debt a thing of the past? Find them by reading through the other articles posted on our blog.