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- 2 min read
- There are many answers to: "How do I consolidate my debt?"
- Debt consolidation programs are NOT one size fits all, do your homework.
- Evaluate how you feel about your financial goals, and let the best debt consolidation program fall out of that analysis.
- Start your FREE debt assessment
Consolidate My Debt Tips and Advice (with video)
Are you asking yourself: "How do I consolidate my debts?" or "How do I consolidate my bills?"
With all the bad credit news recently, and the staggering amount of debt impacting American families, millions are now asking, "How do I consolidate my debt or consolidate my bills safely and affordably so I can save?" It is still possible to consolidate debts and make your way to financial freedom, but you have to be make wise choices and be committed to getting out of debt. You need to know your goals and if you are looking for a new loan (one way to consolidate debt) or a service that helps you make payments and pay down your debts (a very different way to consolidate debt).
We frequently advise for consumers with debt problems to seek help, but start by getting a solid game plan in place so that when you ask "How do I consolidate my debt?" you know what you are asking and where you want to go. This means prioritizing the key variables, including:
- Low monthly payments
- Lowest total cost
- Experience and amount of work you have to exert to get debt free
- Time to debt freedom, and lastly
- The credit rating impact
For example, Credit Counseling or Debt Settlement are services that can help someone consolidate debt and the benefits are a low cost and a low program payment. However, these benefits come at a severe cost as you will face challenging times including collection processes and your credit rating will be impacted.
At the other end of the spectrum, a refinance loan is a great way for a consumer to roll all of their unsecured debts into one new loan, but it will typically take 30 years to pay off that new mortgage loan and the total cost could be high, given decades of compounding.
For an in-depth look at options for debt relief, take a look at our debt white paper and our debt relief options comparison tool.
Bills.com has all the resources and advice you need to consolidate debt, change your spending habits, and pay off your debt more quickly. You can find an affordable debt consolidation loan in the Bills.com Debt Savings Center. You will also find additional resources to help you get control of your finances and make a permanent change for the better so that you never have to worry again about "How do I consolidate my debt?"
Get rid of your debt faster with debt relief
Take the first step towards a debt-free life with personalized debt reduction strategies.
Choose your debt amount
Or speak to a debt consultant 844-731-0836
Debt statistics
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Massachusetts, 17% have any kind of debt in collections and the median debt in collections is $1580. Medical debt is common and 4% have that in collections. The median medical debt in collections is $408.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
10 Comments
I suggest you use the Bills.com Debt Coach, a free tool that will help you weigh the pros and cons of the different options available.
If you don't have equity in a home that you can borrow against, it will be difficult to find an unsecured loan to meet your goal.
If you have high interest rates on your debts, I suggest you look at credit counseling. In a credit counseling program, the creditors receive 100% of what you owe. You can see if the program will be able to deliver lower interest rates that will speed up the time it takes to pay off your debts, before you sign up.
Are the student loans private? If so, then you have fewer options. Follow the link I just mentioned to learn more.