Debt consolidation provides debt relief despite continuing with debts

Today’s society moves on consumer debt, and Americans especially are very fond of debts. It is evident from the average personal debt for households exceeded $38,000, excluding mortgage loan balances.  Therefore, the habit of living on debts affects the majority of Americans, with only 23% of the population not carrying debts in 2018. With such widespread borrowing, people have become used to it. So, they find it hard to come to terms with debts as they become wary of managing too many debts. Therefore, it is no surprise that most Americans consider debt reduction as the top financial priority. It is not always the amount you owe that bothers you but making timely payments for multiple credit accounts becomes a concern for most creditors. Read about Hani Zeini.

The difficult economic situation that we are now facing is the fallout of too many consumer debts so as Americans keep drowning in debts. Although economists believe that the economy is now turning around, the fact is that many Americans are still struggling to come out of debts. Usually, people take to extremes when handling debts. It is evident from the surge in personal borrowing and also at the other end of the spectrum is the desire to lead a debt-free life, which is practically impossible. However, the real solution is somewhere between the extremes or to take the middle path.

Do a reality check

Before you think about any debt relief measures, you must first consider the realities that you face. Borrowing is not bad if you can keep debts within limits so that you can make monthly payments conveniently. However, things can go out of control once you cross the threshold of borrowing that exceeds 50% of your total earnings. It can make payments difficult and then gradually sink you deep into debts. Therefore, the inability to make timely payments would multiply outstanding debts many more times and drive you into an abyss from where it is almost impossible to escape. Some people despite keeping debts within manageable limits still find it challenging to live comfortably with debts. They find it stressful to manage too many creditors. Despite having funds, they cannot manage the loan accounts properly and experience too much stress to cope with debts. 

After all, being more disciplined in spending by controlling expenses is an excellent way to keep debts under control. It is easily manageable, but the task is not as easy as it seems. In fact, if people could show restraint in spending, then they would not have taken any loans at all. The easy availability of money in the form of credit cards creates such a situation that people cannot control their emotions and also indulge in heavy spending. In 2018, credit card loans reached $829 billion, which is $45 billion more than in 2017. Irresponsible use of credit cards is one of the reasons why people are sinking in-depth and desperately seek debt relief.

Have the mind to keep debts under check

Some debts are essential for leading a good life like mortgage loans or car loans without which it is impossible to fulfil your wishes of owning home or car. Similarly, paying for high medical bills or children’s education are some valid reasons for availing loans. But most of the other instances when people reach out for debts are mostly for fulfilling their artificial needs based on instant gratification. They can also avoid this, and such debts keep spiralling rapidly. Therefore, it is all in the mind when it comes to keeping debts under control that should be easy to manage.

So, begin by introspecting to identify the pain points that you face in managing debts. Is it difficult for you to arrange for funds to make regular payments? Or is it that funds are not a problem for you, but poor debt management is your biggest concern. Your credit score will also provide hints about what plagues you in managing debts.

If you maintain a decent credit score, it shows that your repaying ability is not an issue, but perhaps you are unable to manage several lenders who seem to breathe at your neck. Therefore, in such cases, consolidating the debts is a sure way of overcoming the problems you face. Debt consolidation will relieve you from dealing with several creditors, and also you will feel comfortable to carry on with debts taken from a single creditor. It is a proven method of debt relief that removes all stress in debt management and gives you the confidence to use debts for rebuilding your finances.

What is Debt Consolidation?

Converting several debts into a single debt is known as debt consolidation. Do you find it very difficult to manage several loan accounts by monitoring each account to track different payment dates of multiple lenders? It can build enormous stress and make life miserable for you. This is the time when you feel how comfortable it would be to have a single creditor so that you could manage debts in a better way, and you start toying with the idea of debt consolidation.

All that you must do to initiate the process of consolidating debts is to figure out your total outstanding debts. Then arrange for a new debt consolidation loan that should help to pay back all creditors, and you start a new journey with a single lender. Therefore, start the exercise by targeting loans that carry high interests that you can bundle together and knock off with the help of one big loan. When you are consolidating debts, you get the opportunity of reorganizing several bills with different interest rates and different payment dates. You can replace it with a single debt that helps to meet your financial goals.

It’s easy to deal with one lender

When you drastically cut down the number of lenders in one stroke by consolidating debts, it removes a lot of stress that you had faced earlier. Now, you have just one lender and one payment date it is more assuring as it leaves no room for missed payments. The arrangement makes you forget the earlier days when you had to face a barrage of calls from several lenders with each one pursuing you for timely payments and more so for overdue payments. Besides, when you are availing the new loan, you can negotiate for a lower interest. It can lead to some decent saving which gives you the same pleasure of enjoying the topping on the cake. Reduced monthly payments give you the option of making effective use of the surplus money that goes a long way to bolster your finances.

Is debt consolidation the best option?

Debt relief is also available in other forms like debt management, debt settlement and bankruptcy, and you must evaluate every option before deciding on debt consolidation. This is very important because every method has its pros and cons, and the choice depends on your financial status and the circumstances that you face. Understanding the consequences of the debt relief method should help to make the right decision.

Work alongside the debt relief company

The task of debt consolidation is a professional exercise best implemented by a reliable debt relief company like They take the responsibility of negotiating with your creditors to convince them to accept your terms of making early payment for settling debts. Besides handling your creditors, the debt relief company will also help you to find out a lender who offers debt consolidation loans at a very competitive rate of interest, which is lower than what you paid so far.  Moreover, the debt relief company will give you the confidence that you have made the right choice. There could not be any better alternative to it. Only when you have compared all debt relief methods you can be sure of making the right choice.

The debt relief company will handle your case in consolidating debts and do all the heavy lifting. But you must work closely with them to drive the process smoothly by being aware of what is happening and how it can affect you. Only when you are fully convinced that the debt consolidation plan worked out by the debt relief company is beneficial for you and could help to turn around your finances that you must give them the go-ahead.  A lot depends on your support for driving the process towards a meaningful conclusion, and you must play your part very well.

Debt consolidation provides ample debt relief, but for a long-term solution to your problems in debt management, you must identify the root cause of the problem. If you lack fiscal discipline, which is a prime cause for entangling in multiple debts, then you must learn to be more disciplined with your finances. It can help to can cut down reckless borrowing. Monitoring your expenses closely should help to identify the wasteful expenditures that you can factor in when creating a realistic budget that helps to generate a surplus every month. It will put an end to your habit of relying on debts.

The positive outcome of debt consolidation should encourage you to be more responsible for debts.