There will be times where you’ll have too many debts that it gets hard for you to keep up and track all of it. For some, especially for those who are not good at organizing and following repayment schedules, having a lot of debt can lead to bankruptcy, which is something you wouldn’t want to experience.
Fortunately, debt consolidation loans are available for individuals who want to ease their debts and need to reset their finances. But what is a debt consolidation loan, and what are the indications that you need it?
What Is Debt Consolidation Loan and How Can It Help?
A debt consolidation loan is a loan you can acquire to pay off all other existing loans you have. This way, you will only have one loan to pay every month, which means that there will only be one interest rate you need to worry about. Hence, you don’t have to pay multiple loans with a tremendous interest rate if you decide to take a debt consolidation loan.
Multiple loans mean multiple interest rates. Having too many interest rates to pay can be challenging and will hurt your finances over time. If you choose to consolidate all your debts into one loan, including your credit cards, you can easily track your debts without worrying about multiple interest rates and repayment schedules.
When Do You Need A Financial Reset?
Debt consolidation can be a massive help when it comes to managing multiple loans, allowing you to have a financial reset. If you are experiencing the following situations, it is an indication that your finances need a fresh start.
Having No Idea How Much Your Debt Is
One of the clear indications that you need to start consolidating your loans is not knowing how much you owe anymore. Having multiple debts will make it difficult for you to track the sum of the money you owe. This may not be a problem to some, but not knowing how much debt you’re in might lead to more serious problems.
To keep up with all of your debts, you will need to pull out the most recent statement of account from your debtors. After this, list down all the accounts, plus your current balance, for each debt you have. You must learn how to organize and track your payments to know how much exactly you owed. With a debt consolidation loan, you can now quickly track the money you owe so that you can budget your income accordingly.
Borrowing Money Just To Pay Off Debts
Many people might be doing this, but instead of doing the same, why not consolidate all your debts? The idea is the same: you’ll borrow money to pay off your existing debts. However, consolidation can provide you a permanent and long-term solution compared to simply borrowing money to pay off your current loans.
Overwhelmed By All Your Debts
Feeling overwhelmed with your debts and having no idea how to get out of them is another red flag you must watch out for. If you are already experiencing it, then there is no time to waste. What you need to do is to have a financial reset to have more free-flowing finances.
Work Performance Affected By Issues on Personal Finances
Problems with your finances can be frustrating and can result in poor performance at work. More importantly, this is not the right time for you to slack off and feel depressed because of your financial issues. Instead, you must stand up and work harder so you can pay off what you owe.
Although it is easier said than done, having a strategy for managing your debt can be a huge help to resolve your financial issues, allowing you to focus on your work. Losing your job in the middle of a financial dilemma can harm you and your savings, which is why you must plan your financial reset as soon as possible so it won’t affect your work performance.
Starting to Feel Stressed With Your Finances
Stressing over your multiple debts means that you are already in serious trouble. But instead of dwelling on the things that you cannot undo, why not focus more on the things that you can still do to help yourself out?
If you are starting to experience fatigue, lack of sleep, and constantly worrying over your debts, then you must consolidate all your debts as soon as possible.
Want A Fresh Start?
Debt consolidation can help you start anew with your finances. Everyone has debt. However, there are a lot of people who can manage their loan obligations without feeling overwhelmed. These people handle their debt very well by strategizing and managing their finances.
One of the strategies most of them do is consolidating all their debts into one loan, be it a loan from a bank or online lenders like CreditNinja.com. With this method, your debts can become more manageable, and you can start doing something about it before it’s too late.