Credit card debt has the potential to become overwhelming, straining your finances and making it seemingly impossible to get ahead. One of the most popular questions people ask is how to consolidate that debt, so that it’s easier to manage.
Did you know that Americans owe an amazing $1 trillion in credit card debts? Considering the population, it’s not quite as much as you may believe, but it is still quite shocking. The average household has several thousand dollars in debt threatening their financial security.
How can you pay down high credit card debt?
One of the things you can remember is that consolidation is extremely helpful. Consolidating debts onto a personal loan allows you to reduce the interest rate (in many cases) and will have a fixed term that you can’t add more debt to.
For example, you can take out a loan for $20,000 to consolidate student loans and credit debt. If the payments are $250 a month for 10 years, then you know that the debt will be completely paid off at that time (or sooner, if you can pay more each month).
Consolidation loans can range from as little as $1,000 up to $100,000 in some cases, giving you a great opportunity to lock in a lower interest rate than what you pay on your credit cards or other loans. This means you’ll pay less over time, saving you more money than if you’d simply paid off your credit cards on their own.
No two people have the same debt struggles, but if you do, there are ways out. Our site has more on what to do if you’re struggling with debt.