When it comes to debt consolidation, the traditional method is to apply for a single large loan from a credit union or bank, and use the cash for paying off smaller debts. This can be very effective, unless you have low credit score or far from stellar payment history, which means it may be impossible for you to get approved for a debt consolidation loan, or also known as bill consolidation loan. Whatever the case is, you can expect the loan to have high interest rate. Let us tell you when to consolidate your depts.

Tell-Tale Signs That It’s Time to Consolidate Your Debts

If you are unsure if debt consolidation is right for you, watch out for these signs:

• You spend more money than what you are earning.
• Instead of shrinking, your credit card balances continue to grow.
• You are paying only your debt’s minimum payments and even this is difficult enough for you.
• Your credit card debt’s interest payments go beyond the amount purchased every month.
• You have debts on over 5 credit cards.
• You were rejected for a store installment or credit card loan because of your high debt to income ratio.
• You are at or approaching the limits of your credit card.
• You carry balance on your credit cards with interest rates of more than 18.99%.
• You have a falling credit score.
• Every time bills come in email or mail, you dread the mere thought of opening them.

Benefits of Debt Consolidation

• Single Consolidated Payment – Paying lots of debt payments is actually a hard work. Mail could get lost, late fees may pile up, and life could get busy. With a debt management plan, you can make it easy. You consolidate debts into a single payment.
• Reduce Your Interest Rates – Once you qualify, you might not be able to secure low interest rates from creditors.
• Pay Off Debt Quicker – Every year, many people graduate to the status of debt-free. You can also do it. Just believe in yourself and have some determination.
• You Select the Due Date – have you ever felt like you’re juggling a lot of payments with many due dates? Well, with the right and best debt management plan, you will be able to schedule the right due date that your debit pays your debts. It means no more confusions what should be paid when debts are paid with a single payment.
• Free of Charge Financial Education – You can be debt free like anybody else. But, the question is, how can you stay that way? Well, you can teach or motivate yourself to be free from debts. There are financial programs that will teach you the ways to save money, set some achievable financial goals, and establish emergency funds if possible.

Secured debts including automobiles, property, and homes can be refinanced, yet aren’t considered as good candidates for debt consolidation for the reason that you’re placing a valuable asset at risk. Homes can be foreclosed and cars can be repossessed once you miss your payments.