Tuesday, March 29, 2016

Is Debt Consolidation the Best Choice for My Finances?

For many, debt consolidation can be beneficial when it comes to refinancing loans and paying out debt. For others, debt consolidation can help very little in their goals of becoming free of the financial and emotional burdens of debt.

While it may sound tantalizing to consolidate all of your loans into one place, there’s much more to consider when choosing to consolidate your loans. It may be true that consolidating multiple credit accounts into one principle loan with a single payment can help lower your overall monthly expenses and eliminate the stress of multiple payments each month, but it could be possible that you would lose certain benefits, increase your time spent in debt, face higher interest, and more.

Remember that consolidation works best as part of a larger plan to become free of debt, not as a way to postpone repayment. Before you seriously consider consolidating your loans, ask yourself the following questions:
  • Is my debt load manageable?
  • Is my credit level advantageous for debt consolidation?
  • Am I serious about becoming debt-free?
  • Is a personal loan the best option for my finances?
  • Will it help me face my student loans more efficiently?
  • Once I am debt-free, will I be able to stay debt-free?
It may be to your benefit to talk to a Member Advisor at St. Cloud Federal Credit Union to answer the questions above and more to help you determine if debt consolidation is best for you.

St. Cloud Federal Credit Union offers another easy way to help determine whether debt consolidation is right for you. The St. Cloud Federal Credit Union Personal Debt Consolidation Calculator offers a simple method of self-calculating your credit cards, auto loans, and other loans and installment debt. The St. Cloud Federal Credit Union also offers a comprehensive glossary of loans terms for transparency and for those new to the process. To learn more, check out our Personal Debt Consolidation Calculator.

Debt repayment and credit counseling programs can further help you repay your loans more efficiently. Whichever method you pursue in consolidating your debts, know that the experts at St. Cloud Federal Credit Union can help you get your finances in order and can help you on your way to becoming debt-free.

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