Why you should consolidate your debt for June
Are you contending with high-interest debt? If so, debt consolidation may be worth considering. With debt consolidation, you borrow money with a new loan to pay off multiple debts, effectively consolidating those debts into one.
There are a couple of routes you can take to consolidate your debts, including taking out a debt consolidation loan on your own or working with a debt relief company for help. In either case, debt consolidation may not just simplify the payment process but could also save you money, as the goal is to obtain a lower interest rate on your loan.
And, with summer just around the corner, now may be a good time to consolidate your debts. After all, the summer months may come with new expenses, and dealing with high-interest debt when these seasonal expenses arise can be stressful. But, that's not the only reason you should consider consolidating your debt this June.
Find out how debt consolidation can help you eliminate your debts today.
Why you should consolidate your debt for June
If you're dealing with high-interest debt right now, here's why you may want to consider consolidating debt this June:
The cost of your debt could increase
High-interest debt is already costly, and there's a chance that the cost of that debt could increase further due to inflation. The Federal Reserve's main response when dealing with high inflation is to hike rates. And, when the Fed increases its federal funds rate, financial institutions tend to increase their rates in tandem, which drives up the cost of variable-rate debts.
While inflation cooled to 3.4% in April, it's still higher than the Federal Reserve's 2% target. And, April's inflation report followed three consecutive months in which the inflation rate came in higher than expected. If inflation remains elevated and the Fed decides to increase rates in the future, the cost of high-interest debt could climb further. But most debt consolidation loans offer fixed interest rates, so if you consolidate your debt now, you won't have to worry about future rate hikes impacting the cost of your loan.
Compare your debt relief options today.
Price growth may be stretching your budget
As prices continue to rise due to inflation, many Americans are struggling to make ends meet. After all, higher costs of food, gas and housing can mean your income won't stretch as far as it did in the past. But, consolidating your credit card debt can help.
Debt consolidation loans typically have lower rates compared to your credit cards, which can result in lower monthly payments compared to your current credit card payments. And, if you're paying less in total on your debt payments each month, you'll have more money in your budget to help make ends meet, even amid today's high inflation.
Debt consolidation can streamline the payoff process
Consolidating your debt this June could also simplify the process of paying off your debts. By rolling multiple credit card debts into one loan, it's typically easier to manage your monthly payment obligations since you're not having to juggle multiple credit card payments each month.
"Debt consolidation makes sense for people who have multiple debt payments at high interest rates because it combines debt into one monthly payment," explains Michael Broughton, founder and CEO of ALTRO, a credit-building app.
The bottom line
If you're looking for an efficient way to pay off high-interest debt, considering one of the debt consolidation options could make sense for you this June. After all, the cost of debt could rise if inflation stays high, and today's elevated inflation rate is already putting strain on American budgets. Debt consolidation can also help simplify the payoff process by rolling multiple debt payments into a single monthly payment. Compare your debt consolidation options today.
