Behind the Vault

Why You Should Consolidate Debt in the New Year

The holiday season has come and gone. While you can’t put a price tag on the memories made, you may now be feeling the burden of the debt you accrued in the process. If you’re feeling a bit anxious about paying back your holiday debt, there’s a relatively easy solution – debt consolidation.

Consolidating debt may sound complicated, and it may sound more intimidating than slowly paying down your current balance. However, the process is a lot easier than you may think and can help you save a significant amount of money over the long term. It’s a Win-Win!

What is Debt Consolidation?

Debt consolidation is simply the process of transferring one or multiple credit card balances or loans to either another credit card or loan.

By moving your current debt from multiple credit lines to just one new account (a Family Trust credit card, personal loan, or even home equity line of credit), you can simplify your bills. Instead of paying three or four credit cards each month, you’ll now only have one account to manage monthly. Furthermore, you can save a large amount of money by consolidating debt!

Why You Should Consolidate Debt:

There are many benefits of consolidating debt, including:

Save on Interest. If you have several high-interest credit cards, transferring all outstanding balances to a lower-rate card or loan may help you save a significant amount of money each month in interest. Check out our great balance transfer offer going on now through March 31, 2023.

Easier Money Management. If you currently have several different credit cards or short-term loans, consolidating them all into a single new credit card or loan is a wise move. Instead of keeping up with a handful of due dates and payment amounts, you’ll only have to make one payment each month. Plus, instead of paying several different interest rates each month, you’re only paying one interest rate, potentially resulting in significant savings.

Quicker Payoff. When managing various credit card debts with high balances, it’s easy to fall into the trap of only making your minimum monthly payments. By simply making the minimum payment, you are paying mostly on the interest accrued on the card and minimal the principal. Therefore, you’ll never really see your balance go down. 

When you consolidate all your current debts into a Family Trust personal loan, you’ll have a set monthly payment amount (just like your car loan payment). This strategy helps you pay off debt quicker and reduce the amount of interest you pay over the long term.

Decrease Stress. Large amounts of debt without a plan of paying it off can add a significant amount of stress to your life. When you consolidate your debt, you’re taking control of your finances and bringing some organization to your life, which will help to reduce your financial anxiety. 

We're Here to Help!

High amounts of debt can adversely affect your overall financial and mental health. Debt consolidation can be a great option to get your finances under control and ultimately pay off your debt quicker while saving you a significant amount of money.

If you are considering consolidating your debt into a fixed-rate personal loan or lower-interest credit card but have additional questions, we’re ready to help. Chat with one of our Associates conveniently from your work or home with our chat feature on our mobile app or website. Or, if you are ready to apply, just go to our mobile app and tap apply. Our skilled professionals can help assess your current credit lines and owed debt and help you form a plan to pay the debt off with less stress.