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What is Debt Consolidation?

How Does Debt Consolidation Work?

Feeling overwhelmed by multiple debts? Imagine streamlining them into a single, manageable payment. That's the power of debt consolidation! By merging your credit card balances, medical bills, and other unsecured loans, debt consolidation can simplify your financial life.

Pros and Cons of Debt Consolidation

Simplicity: Say goodbye to juggling various bills and due dates. One payment, one deadline.

Potential Savings: Benefit from possibly lower interest rates, which could translate to reduced payments over time.

However, a word of caution: while consolidating might mean lower interest, the loan term's length could lead to higher total interest.

Is debt consolidation initiative the golden ticket for you? It hinges on your unique financial landscape and the consolidation type you're eyeing. If you're navigating a maze of unsecured debts across numerous accounts, this strategy might be your guiding star, especially if you're grappling with steep interest rates.

Curious about your options? Dive deeper into our debt settlement solutions and discover how we can tailor a debt solution just for you. Let's embark on your journey to financial serenity.

Financial Rescue’s Debt Consolidation Plan

Debt consolidation is a strategy to manage high and/or unmanageable debt by refinancing multiple debts into one single loan payment. Typically these debts include credit cards, medical bills, or unsecured personal loans. The advantages of debt consolidation can be the the simplicity of rolling all outstanding unsecured debt into one easy payment, and also potentially lower interest rates.  

One way to consolidate debt is by using a personal debt consolidation loan. These are popular because these loans can be used for practically any purpose, i.e., paying for a major expense like a wedding or simply to incorporate all of your unsecured debt into one loan for potentially better terms. The advantage to handling your debt in this manner is simplifying payments and potentially lower rates. Most debt consolidation loans have terms of anywhere from 24-72 months. Beware however that even if you get a lower interest rate, you could pay more in interest if you choose too long of a loan term. 

Depending on your credit score and debt-to-income ratio (DTI), the rates for a debt consolidation loan will range anywhere from 10-32% and will typically be a fixed rate.

A debt consolidation loan could be worth exploring if you can get a lower rate than you’re currently paying on your credit card debt and you can afford to make your new monthly payments. Unfortunately, some people who are struggling with heavy credit card debt can’t get a good rate on a debt consolidation loan because their credit score is too low and their debt-to-income ratio (DTI) is too high. Find out how a debt consolidation loan works.

Debt Consolidation Considerations

Give thought to the following when contemplating a debt consolidation loan:

  • Will you be just consolidating current unsecured debt? If so, how much?
  • Will you be consolidating debt as well as obtaining a loan for another purpose?
  • Debt consolidation loans typically can extend the amount of time to pay off debt, but if the amount is too high, you could end up paying more every month, and pay more in total interest charges.

Debt consolidation can be a good choice if:

  • You have good credit and can get a good rate
  • You can afford the monthly payments 

If you qualify for and move forward with a debt consolidation loan, understand that it is still a loan that needs to be repaid.

Client Testimonials

Debt Consolidation Done Right.

Our proven debt settlement programs help you pay off your debts in 24-48 months.

We negotiate with your creditors to significantly reduce the amount you owe and slash your monthly payments.

Ready to cut the ball and chain of debt and get your life back on track with debt consolidation relief?

Contact us today to find out how we can help.