What is debt consolidation?

I am Mompreneur. A stay-at-home mom with 3 homeschooling kids, and was able to manage a little side-hustle as a home baker and mommy blogger. As a mom, it may seem that I have lots of things to do and accomplish on a daily/monthly basis especially the finances. 

Money Matters. It is very important for me to know every detail, like the cash flow in and out on a monthly/yearly basis. An example is to determine where most of our household budget goes, like utility bills, rent, food, and others. It'll be okay if we have a steady income and stick to our budget. But sometimes, the money that I'll earn will depend on the projects I booked. And during this pandemic, projects are on and off that sometimes resulted in insufficient funds against household and ad-hoc expenses.

Credit Cards To The Rescue. With the horrific pandemic that hits the world, most of us lost their job and livelihood. As for me, projects become lesser to almost none. The world stopped, my work and income too,  It is also all over in the news that economic stability is also affected where people suffer lay-offs, if not they will work on a skeletal basis like 3-days in a week to distribute jobs to affected workers. Sadly the bills we have to pay didn't even care and keep on running. And having a credit card is such a saver! I was able to use my card as an alternative way to pay when I go grocery shopping or even paying my bills online.

The Good and The Bad. Some of us may have savings, and others have none, that's why a credit card is super handy these days.  Others even have multiple credits cards. But with every swipe, comes a price to pay plus interest too, and having a credit card - billing due dates come next. Good practice on using credit cards is to pay it in full. But with the financial issues, we are currently on, some of us might resort to just paying the minimum amount required to comply when it comes to paying credit card dues. Then, by the next payment date, still you cannot pay the total amount and repeat in shelling the minimum. And with that, it'll pile up including charges such as late payment as well as interest fees for not paying the full amount due.

This happens continuously until such time, later on, you’re already in (huge) debt. But please know that there are ways that can help you pay and settle all your debts. One way is for you to Apply for Debt Consolidation. 

Debt consolidation is to combine multiple loans into one new loan. Allowing you to pay with a lower interest rate and just minding only one loan or account to pay rather than thinking of 2 or more accounts with separate and ballooning interests. For example, you have unsettled payment on multiple credit cards, combine all your credits dues, as a way to consolidate debt, assess yourself and your financial capacity and visit DebtConsolidation.com and check for loans that will suit your needs. This is also an online resource, tools, and programs to help you manage your debt. Once you apply and get approved, you will only worry about one due date and account to pay monthly.  

Here are some tips on debt consolidation you want to consider before availing.

  1. Make a List: List down your debts, like credit card unsettled bills or personal loans from different lending companies. 
  2. Get Ready. With all billing statements or statements of accounts in your hand, it is important to know and have all records on these transactions for reference.
  3. Know the Pros and Cons. You should also be aware of the pros and cons of debt consolidation to settle your debt. For example, you may reduce monthly payment is an advantage when your application is approved and also be able to boost credit in your credit score since the old loan will be changed into a new loan that needs to pay on a regular basis.  Also, know your monthly budget prior to applying for loan consolidation. This is very important so that paying your debt on a regular basis have met.
  4. Be Fully Informed and aware of your new loan structure.
  5. Pay on time. Make it a habit to pay regularly to avoid interest charges.

Debt is a responsibility to pay especially loans no matter how big or small.
Also, be responsible for your spending and pay on time. Be a debt-free individual.