Debt Consolidation with Midwest Regional Funding
How Can Debt Consolidation Help Me
Even though it may not seem this way on the surface, lots of Americans are struggling underneath enormous piles of debt. The debt of an average American adult is just over $90,000 and the student loan debt is in the trillions. It’s easy to blame debt on people’s irresponsibility but maybe that isn’t always the case. One of the big reasons why there is so much debt in today’s world is because there are so many things people need to borrow money for. For example:
- Attending a university (for you and your kids)
- Purchasing a car
- Buying a house
- Starting up your own business
These are 5 times that most Americans will probably take out a loan and go into debt. AND this list doesn’t even include one of the biggest contributors to personal debt: credit cards. When you factor in that most people have a few thousand dollars worth of credit card debt it gets even more unsettling.
One of the biggest problems with all this debt isn’t even paying back the money. Most people work very hard and take pride in their ability to repay their debts. The problem is that it gets so confusing trying to figure out exactly who they need to pay and how much!
This is where debt consolidation can make your life a LOT easier.
What Is Debt Consolidation?
Debt consolidation is the process of rolling combining multiple debts into one payment. It works like this:
John is a responsible adult but owes a few different lenders. He still has some student loan debt, a mortgage, and some mild credit card debt. Each month he makes different payments to different institutions at different rates.
He decides to take out a debt consolidation loan and pays off all of his existing debt. He also was able to get a lower rate on his new loan.
Now John only has to worry about one loan payment each month, is saving money, and has a much better understanding of when he will be debt-free. Does it sound like John is in a better position?
Why Would You Consolidate?
Just like with John, debt consolidation makes the most sense when you owe money to a few different lenders. You’ll usually be able to save money by securing a lower interest rate as well as create a more streamlined cash flow.
Why Should You Choose Debt Consolidation?
As crazy as it may sound, a few months from now you could be in an entirely different spot financially! You’ll know exactly where your money is going, who you owe, how much, and when you’ll be debt-free entirely.
It’s Easy!
Instead of worrying about paying different lenders and setting up a few different automatic payments, now you are only responsible for one payment. The best part is it’s incredibly easy to schedule automatic payments directly from your smartphone.
You can take advantage of some serious savings
This is especially true if you’re consolidating debt that has a long time horizon (for example a mortgage that make take 15-30 years to pay off). Imagine all of the money you will save on interest over the course of 30 years
You can take control back
There is nothing that makes you feel more out of control than having to deal with debt. Take this control back by taking a direct step towards repayment.
How does this work?
There are two main ways to go about debt consolidation. Both of them focus on combining 2 or more debts into a single, easy payment.
- Get a 0% interest, balance-transfer credit card: You can transfer all of your debt onto a credit card. Then you can focus on making monthly payments to that card.
- Get a fixed-rate debt consolidation loan: Take out a loan and use it to pay off your debt. Then repay that loan in monthly installments.
These methods are very similar but there are a few differences. To determine which of these methods is perfect for you, we’d recommend speaking with one of our professionals.
Even if you’re unsure, it’s free to call and ask more questions! We’re happy to chat.
How can I get started?
We want to make it clear that debt consolidation isn’t going to magically erase all of your debt. First, you’ll need to correct your underlying money habits to make sure that you don’t fall back into debt again. This means creating and sticking to a strict budget and making consistent payments towards your debt each month. From there, debt consolidation will help propel you in the right direction.
If you’ve made the decision and are ready to discuss consolidating your debt, feel free to schedule an appointment or give us a call below!
Different ways your debt is hurting you
The main thing that we want people to understand is all the different ways that their debt is hurting them. Living life with debt is like running up a hill with a weight vest and wondering why other people are beating you. Once you have a good understanding of how your debt is weighing you down, you will be eager to get rid of it.
1. Having debt impacts your ability to save and invest.
Since you have to spend money each month repaying your debt, you have less income to save and invest.
2. Debt payments take away money that could be spent on other things.
Let’s say you pay $200 per month on debt payments. That’s $2,400 for the entire year! If you didn’t have to pay this debt you’re essentially adding $2,400 to your income.
3. Having debt hurts your credit score.
Not only is it difficult to make the monthly payments on your debt but it also hurts your ability to borrow more money. This could be a problem if you’re looking to buy a house or start a business in the next 5-10 years.
Okay – we’re done being negative! Now it’s time to talk about solutions.
Let’s talk about
your debt!
Having debt is usually something that most people don’t like to talk about. Granted, it’s probably not something you should bring up on a first date but that doesn’t mean you shouldn’t talk about it! In fact, talking about your debt is a really good step in the right direction. That’s because everyone’s financial situation is different. The best way to make a decision is to speak with a professional about your specific needs.
Speaking about problems can help you understand them
Since you have to spend money each month repaying your debt, you have less income to save and invest.
It helps you face your debt
Having lots of debt can easily feel like a hopeless situation and we all know that hopeless situations are the easiest to ignore. However, ignoring it won’t make the problem go away. Instead, understand your debt and let us help you attack it.
You might discover new options
We have seen every different situation in the book, trust us. There isn’t much that surprises us anymore. The good news is that we are always able to help point people in the right direction! Even if you just want to get some advice we are happy to help.
