Priority Plus Financial discusses the Top 5 Reasons to Consolidate Debt Right Now
Priority Plus Financial understands what it means to pay debts. Sometimes, it is a prolonged process that requires time, effort, and money to clear up one’s debt. There is that and there is also the fact that some people also love making excuses because they are either not dedicated to paying the debt on time or they have accumulated a large amount of borrowed money that it becomes next to impossible to pay the amount and interest back on time.
No matter how big (or scary) the loan amount, it is always the responsibility of the borrower to pay back the amount owed. That is why we at Priority Plus Financial always make it a point to give advice to clientele regarding how and when to consolidate debt.
Speaking of consolidating debts, one of the main reasons why some of our clients have completely erased their debts is because they consolidated their debts at the earliest time possible. If one has an outstanding debt, do not linger any more. Do anything and everything to pay back debts at the earliest available time!
Here are some good reasons why one must consider consolidating debt now:
Turn Multiple Payments into One Single Payment – Ever heard of the saying “killing two birds with one stone”? Well, this saying is an important one, especially when it comes to paying debts. Consolidating debt makes debt payments simpler and can result in lower monthly payments because of the longer payoff period. For people with multiple credit card balances, consolidating everything into one sole source will feel like a huge weight has been lifted from one’s shoulders. The debt is still there, but since it is no longer divided into multiple payments, there is enough time to save money to pay that one single debt.
Interest Rates are lower – When it comes to finances, the credit score means everything. It is also a determining factor on what to expect for interest rates when consolidating debt. Unsecured debt, especially credit card debt, is notorious for having high-interest rates. The longer it is left unpaid, the more burdensome it will be when one needs to pay all of it. The average interest rate for people with good credit scores can go from 4% to 20%. Meanwhile, people with poor credit scores might end up paying 15% to 36% of their consolidated debt. This is why Priority Plus Financial has always made it a point to advise their clientele on proper timing and methods to consolidate high interest debt.
Improves your Credit Score – Consolidating debt can help improve poor credit score. When you consolidate debt due to a personal loan, there will be improvement with the credit score in just a few months, thanks to a huge reduction with one’s credit utilization rate. This number comes from the amount a person owes which is divided by the credit limit. So, if a person has $5000 in credit available on two different credit cards, that person’s credit utilization rate is at 50% since this person is only using half of the total available credit.
Keep in mind that it is normal to see a small temporary drop when acquiring a new credit card, but the long term goals will be there in the credit score.
Stress is Reduced Greatly – What does one get out of consolidating debt? Why, it is the ability to calm down and relax! Because one has managed to consolidate debt into one, single payment, there is no need to rush all over the place to find money to pay for those monthly payments. Debt is always the biggest cause of stress, which in turn may be dangerous to one’s health too. Taking control of one’s finances and allowing oneself to stay on top of a single monthly payment should clear one’s mind.
A Faster Repayment Method – Finally, one of the most important reasons one should consolidate one’s debt at once is faster repayment of one’s debts. It is common for credit card debts to go on for years before the debt is fully repaid. Credit card debts are known for accumulating interest the longer the debt remains unpaid. Credit card companies will not care if it takes their customers 5-10 years to pay off their debts; that will mean more money coming in due to colossal interest rates!
The best thing about consolidating debt is that there are multiple factors taken into consideration during the consolidation process. Factors such as the length of the loan, credit score, income, and debt amount are needed to produce a sensible payback plan. It’s for this reason that debt consolidation loans have shorter payback periods.
The best thing about consolidating debt is that there are multiple factors taken into consideration during the consolidation process. Factors such as the length of the loan, credit score, income, and debt amount are needed to produce a sensible payback plan. It’s for this reason that debt consolidation loans have shorter payback periods.
Originally published at https://priorityplusfinancial.blogspot.com on July 6, 2022.
