Is consolidating debt a good idea
Try a do-it-yourself debt payoff method instead, such as the debt snowball or debt avalanche.
If the total of your debts is more than half your income, and the calculator above reveals that debt consolidation is not your best option, you’re better off seeking debt relief than treading water.
If you take a loan with a three-year term, you know it will be paid off in three years — assuming you make your payments on time and manage your spending.
Conversely, making minimum payments on credit cards could mean months or years before they’re paid off, all while accruing more interest than the initial principal.
Consolidation isn’t a silver bullet for debt problems.
It doesn’t address excessive spending habits that create debt in the first place.
To do this, many or all of the products featured here are from our partners. It can reduce your total debt and reorganize it so you pay it off faster.
If you’re dealing with a manageable amount of debt and just want to reorganize multiple bills with different interest rates, payments and due dates, debt consolidation is a sound approach you can tackle on your own.
If your debt load is small — you can pay it off within six months to a year at your current pace — and you’d save only a negligible amount by consolidating, don’t bother.Readers also ask Consolidate your debt if you can get a loan at better terms and/or it will help you make payments on time.Just make sure this consolidation is part of a larger plan to get out of debt and you don’t run up new balances on the cards you’ve consolidated. Debt consolidation can help your credit if you make on-time payments or consolidating shrinks your credit card balances.If you do end up choosing to consolidate your loans, make sure that the company you work with is reputable and will walk you through every step of the process.Lorraine was able to find a trustworthy company through recommendations from her friends.