What are the Benefits of Debt Consolidation?

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Before attempting to consolidate your debt it is important to understand both the advantages and disadvantages of debt consolidation. To help educate families struggling with debt, the financial experts at StartOverToday have put together the following list of benefits of debt consolidation.

Reduced Interest Rates
Paying several interest rates at once is going to get pricey, quick. However, when you consolidate your debt, you have one interest rate for all of your debt, which is usually much lower and much easier to manage. Interest rates alone have been known to keep some people in debt all their lives.

Avoid Bankruptcy
Bankruptcy is often a last resort for many people who struggle with their finances. However, with debt consolidation you are much less likely to need to resort to it. When you have fewer loans to pay off, you're also much less likely to acquire additional new loans, thus much less likely to become bankrupt.

Longer Payment Period
Sometimes debt consolidation will lead you to receiving a longer payment period. This will give you more time to get your finances together and make paying off the debt both feasible and comfortable.

Won't be in Trouble
Getting a call (or dozens of calls) from creditors is both annoying and embarrassing. However, debt consolidation can help get you off of the creditors list and on to the path of financial freedom. Then, you will finally be able to plug your phone back in.

Better Credit Rating
Once you consolidate your debt and begin to pay it off all together, your credit score is likely to improve. By making payments on time, and avoiding new credit cards, your credit score can increase and an improved credit rating can open up all kinds of new opportunities.

Lower Payments
Even if your total debt is not reduced, by consolidating your debts the payments should go down quite a bit. This is another factor that should help get you out of debt in the long run, as it will give you more cash to put towards your other expenses.

Become Debt Free Faster
Perhaps the best benefit of all is being able to get out of debt and on with your life faster. The feeling of paying off that last cent compares to no other, and you will be glad to know you made the right choice in consolidating your debt.

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