Would you think about paying your bills with a dollar that’s been cut into pieces? If you have multiple bill payments, that’s essentially what you’re doing in spreading your money out across several different accounts. The more debt you owe, and the more creditors you have to repay, the less effective your money actually is in the long-term.
It might seem like you’re managing your finances by trying to make that dollar stretch, but wouldn’t it make more sense to keep that dollar in one piece and to only pay one bill? This is where debt consolidation can help you overcome the mounting bills and combine your monthly payments.
How Debt Consolidation Can Improve Your Cash Flow
It’s a feeling that many people have experienced at one point or another in their lives: looking at a stack of bills, wondering how it got to the point where so much money was owed to so many people. Debt consolidation, when done right, can help bring those monthly payments down, sometimes to just one payment. This does involve taking out a loan in order to pay off your existing debts. Individuals aren’t the only ones who use debt consolidation as a way to manage what they owe — business can also take out debt consolidations loans.
As an example, the Denver Broncos, a professional football team, took $112 million in stadium debt and consolidated it at a lower interest rate and also obtained better terms. While the regular person doesn’t owe millions of dollars in debt, they can still benefit from consolidation and the way that freeing up their money can improve their cash flow. So if you’re wondering how you can get out from under the mounting debt, ask yourself: If debt consolidation is worked a pro football team, could it work for you?
Consolidation Is One Way Out Of Debt
Debt consolidation loans aren’t the only way to manage debt, however. There are other options, such as using the debt snowball method to pay down debt, or the debt avalanche method (you can read more about The 3 Ways To Tackle Debt on our blog). Additional ways of handling debt include:
- Entering a debt management program, also known as consumer credit counseling — this is where a reputable service works with you and your creditors to help create a program tailored to you.
- Debt settlement — where you or a third party company negotiate with your creditors to lower the amount that you owe.
- Finally, as an absolute last resort, bankruptcy. While it can discharge certain debts, bankruptcy can have long lasting effects on your finances and your credit, so it shouldn’t be considered lightly.
To learn more about debt consolidation and your options, AmOne has several articles on our blog dedicated to debt, as well as information on our website about debt solutions. We also have live help available toll-free at 1-800-781-5187. Our financial search specialists can answer your questions on debt consolidation and our free service can help match you with the highest-rated debt solutions available in your market area.