Finance & Insurance

How a Consolidation Loan Can Help You Get Rid of Bad Debt?

Debt has become a crisis in American life, discussed everywhere from the pages of prominent newspapers and the stump speeches of presidential hopefuls to dinner tables to office lunchrooms.  

And while some forms of debt, like student loans and mortgages, may be justified as a way of attaining skills and capital that will help you accumulate equity, a significant amount of the money owed by ordinary people come from unsecured consumer debt that weighs like a boat anchor on their financial future.  

Getting rid of this debt is the first thing you need to do if you want to be able to start building a sustainable financial life, and in most cases, consolidation is the best way to do so.

The First Step to Getting Your Finances Under Control

Debt consolidation involves combining two or more unsecured debts into one. This includes things like:

  • Credit cards
  • Payday loans
  • Unsecured lines of credit
  • Other unsecured loans

If you want to start the consolidation process, the first thing you should do is get in touch with a certified Credit Counselor from a non-profit credit counseling agency who can advise you about the different ways you can proceed. 

After your initial assessment, they will help you to start exploring your personalized relief options and may recommend you enter a Debt Consolidation Program (you can learn more at Credit Canada about how these programs work). 

Once you’re on a Debt Consolidation Program, you will be responsible for a single, lower monthly payment. Creditors will no longer be able to make collection calls or use other means to coerce payments from you, putting you in a position where you can finally start to make a dent on the balance owing. 

How Consolidation Helps You Rebuild Credit?

Consolidation is just the beginning: the relief consolidation gives you the space to start rebuilding your financial life so that past misfortunes don’t keep you from a brighter, more financially independent future. 

One of the advantages of working with a Credit Counselor from a not-for-profit credit counseling agency to secure your debt consolidation agreement is that they don’t just help you stabilize your monthly payments and negotiate with creditors on your behalf — they also play an active role in helping you plan for financial success. 

Personalized coaching that helps you track and control your spending, set achievable financial goals, and put your money to work for you ensures that when you pay off the last dollar you owe, you’ll be ready to start investing in your future. 

According to one recent poll by NBC News, 25% of Millennials owe more than $30,000, much of it unsecured debt. This is having a wide-ranging impact on their ability to do everything from purchase property to starting a family. 

Getting out from beneath the burden of unsecured debt is the key to unlocking a better life, so if you want to get serious about your finances, get in touch with a Credit Counselor to explore your options for debt consolidation.

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