I’ll sometimes float the idea of debt consolidation so they only have one bill to pay or so they can have a lower interest rate.” There are numerous debt consolidation methods to consider, some of which work better in different situations.
“Debt consolidation really depends on the person and the type of debt,” Germano said.Determining which method will benefit you the most will involve some homework and some calculations … can take many forms, including a personal loan, a balance-transfer credit card, a home equity line of credit (HELOC) and a debt management plan, among others.(We’ll get into the details of those options later on.) No matter what strategy suits you best, the idea is the same: Lump together all or most of your debts into a single payment as a way to save money, simplify your finances … For example, if you have multiple high-interest credit card debts and outstanding medical bills, you may want to take out a personal loan to repay those debts.It is also not a fit if you do not have a consistent source of income that more than covers your monthly payment.Finally, bad credit can keep you from getting a good interest rate, which negates the purpose of a consolidation loan.
This can help eliminate missed or late payments and ensure that you’re addressing all your debts.