Debt is the elephant in the room that no-one wants to talk about. It’s not unusual for people to have some debt in their lives. It only becomes a problem when you have too much debt that you can comfortably pay for each month.
One of the ways that you can reduce the debt you owe is to consolidate it. In layman’s terms, that means reducing the amount of creditors you have and only paying a few instead of a lot! But how can you tell if this is the right time to consolidate your debt or not?
You have too many credit cards
The thing about credit cards is that you pay interest on balances that may have previously had interested charged on them! If you’re unlucky enough to have a high-interest credit card, you could find that you’re not making much of a dent on your debt.
And the situation can go from bad to worse if you have two or more high-interest credit cards. In those scenarios alone it’s worth consolidating your debt. Companies like DCUSA can give you practical help to set up a debt consolidation strategy for your credit cards.
You owe more than you earn
One of the classic problems that people make for themselves is when they take on too much debt. Buying stuff now and paying for it later might seem like a good idea at the time. But when “later” comes, how are you going to pay for those nice things you bought?
Debt can soon spiral out of control. Have you ever heard the saying “robbing Peter to pay Paul”? It’s an apt one for those in the midst of a financial nightmare. Because you don’t have enough disposable income, you start borrowing money to pay off existing debts.
You could always get a new job with a better salary. But one action you can take right now is to consolidate all those debts into a smaller, easier to manage amount.
You can’t afford the increasing monthly payments
Certain debts you might have involve repayments based on factors like inflation. If some of those debt repayments increase to amounts you can no longer afford, it’s time to ask for help. There is no shame in admitting that you can’t afford to repay your debts.
People you owe money to would rather you make smaller payments than no payments. Sure, they might not be happy about receiving lower amounts from you. But it shows that you are committed to clearing your debt, even if it means you’ll take longer than expected.
When you reach the point where you can no longer afford to meet repayments, the first thing to do is tell your creditors of the situation.
The examples above are ones where debt consolidation can offer some light in a dark tunnel. You should always try to work with your creditors if you come under financial difficulty. You’d be surprised by how willing they are to help you!