Debt can be a pain. Luckily for the millions of Americans who are fighting to tackle debt, there’s one proven effective way to help climb out of it faster: consolidating with responsible borrowing. If you’re making it a goal to tackle your debt in 2025, you might need to give this strategy a shot.

What is debt consolidation?

Consolidating your debt is all about combining it into one account. You can do this by obtaining a personal loan or, if you’re a homeowner, utilizing the equity you’ve built in your home to open a Home Equity Loan.

By combining all your debt into one account, you’ll have just one monthly payment to make each month, helping you avoid missed or late payments. Plus, personal loans and Home Equity Loans could potentially have a lower interest rate than your other debt, saving you each month on interest costs.

Why should I consider a personal loan?

Personal loans typically have lower rates than credit cards and other types of loans. By combining your debt into a personal loan, not only will you have lower monthly payments, but it’ll be much easier to calculate how long it will take you to pay off your debt. You can also boost your credit score this way.

Why should I consider a Home Equity Loan?

For homeowners who have equity established in their home, a Home Equity Loan is a fantastic choice for consolidating debt. It can offer a lower interest rate and easier eligibility requirements compared to other types of loans. Similar to a traditional loan, a Home Equity Loan provides a lump sum of money upfront with a fixed interest rate and fixed monthly payments over a set term.

Borrow Responsibly

No matter which path you choose, using a personal loan or Home Equity Loan to consolidate your debt can be a good move to help relieve your debt. Remember, though, that these tools need to be used responsibly. It’s important to always make your payments on time and only borrow enough to cover your needs. Also, don’t take on additional debt while you’re repaying.

Have questions about debt consolidation or borrowing? Consult with a trusted financial professional. Ascend offers our members free Financial Health Checkups with Certified Credit Union Financial Counselors who are there to make sure you’re on the right path to meeting your goals. Schedule an appointment at ascend.org or by visiting any of our 28 Middle Tennessee branches.

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