- 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.
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.
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?"
Struggling with debt?
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Housing debt totaled $11.71 trillion and non-housing debt was $4.45 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%.
Collection and delinquency rates vary by state. For example, in Alabama, 15% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 7%.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.