Why Consolidating Debt Works

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It's hard not to feel anxious when you look at the state of American consumer debt: Our credit card debt was $870 billion in December 2018, while our car delinquencies are bonkers and our student debt is nearing $1.6 trillion. Debt has become a way of life, and for loads of us, it may seem like there's no way out.


Debt, however, doesn't have to be lifelong, nor should it be. There are lots of individual ways to get yourself to pay it down, but one big step is going to help you no matter which path you take. Consolidating your debt may sound like asking you to take various overwhelming bills and turn them into a giant mecha-debt, but it's actually the opposite, at least in effect.

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It's important not to think of this as creating a bigger monster to fight. Instead, debt consolidation is about locking down a lower interest rate. Your various debts might all comes with wildly different schedules and terms of service, which, even automated, can get confusing fast. When you've consolidated, you can not only get lower rates for paying back your lender, but that rate won't change with the market. You'll be able to predict your payments much more reliably.


Consolidation can also let you choose the length of time over which you'll pay down your debt. Of course, it's not an infinite deferral, but it is more control over your financial future. Best of all, debt consolidation can help you keep up momentum. Stick to this simpler plan and you're likely to come out on top.