6 Advantages of Debt Consolidation

We are living in a society where debt is an essential part of life. We have moved away from a hard cash-based society to digital banking which has given birth to debt instruments such as credit cards, lines of credit and loans.

While Debt has its advantages such as paying for items later or increasing someone’s borrowing capacity, it can create havoc in someone's finances if not managed properly.
We all use credit cards and sometimes end up carrying debts month to month until we are able to pay them down. Unfortunately, due to our human nature, we always put it off for later, thinking we will pay it off next month. Until this debt snowballs into a massive financial burden.
So paying off the debt definitely has its advantages. So what are the advantages?
Improves your credit score

Consolidating your debts into a mortgage will give your credit score a nice boost. This is due to your reduction in credit utilization.
Turn multiple payments into a single payment

When you consolidate all your debts into a single payment, you will reduce the chances of missing payments on your credit cards. Sure your debts won't go away magically, but the stress of multiple deadlines on payments will go away.

You can retain more extra funds

Since debt consolidation combines outstanding credit cards into a single payment, with longer amortization, your monthly payments become lower. Sometimes your monthly payment is only the interest. Which gives you extra funds in hand to pay down the capital or invest to generate a better return to pay off your debt faster.
Pay off debts faster

As mentioned above, when you consolidate your debts into a single payment, your monthly payments will reduce and you will have more funds left in your hand at the end of the month. You can use these funds to pay down the capital or invest to generate a better return. Which will help to pay down the debt faster.
Lower your interest rates.

Most unsecured debt has very high-interest rates. Some are around 29% annually. If you consolidate your debts into a mortgage it will have significantly lower interest rates.

Less Stress

Consolidating your debt into a single, manageable payment will greatly reduce your stress and help clear up the clutter that multiple payments can very much feel like.

Money matters like debt are known to lead to stress, but they don’t have to. By taking control of your finances and allowing yourself to stay on top of single monthly debt payments, you’ll clear up your mind and find yourself in a better financial position.
If you own a house, you can look at consolidating your debts into a single payment. Better yet, it will improve your credit and give extra funds in your hand.
If you like to know more about consolidating your debts into a mortgage and paying less monthly, please check my calendar and book a call with me