What to Know About Debt Consolidation

Services | 02/02/24
Glasses, a calculator and money laying on a debt consolidation plan.

Is debt consolidation the right decision for you? Combining multiple loans into a single, larger loan can be convenient, and you may be able to get more desirable payoff terms, like a lower monthly payment or lower interest rate. However, it’s not the right decision for everyone. Here’s what you need to know about debt consolidation:

What are the benefits of debt consolidation?

  • Saving on interest payments. Moving your debts to a new loan or credit line with a low interest rate can translate into big savings.
  • One monthly payment. Say goodbye to juggling multiple debt payments.
  • Boost your credit score. Amp up your score with a balance transfer or loan.

What are the disadvantages of debt consolidation?

  • You may stretch out the payment timeline.
  • You still have to practice responsible spending habits. Once you’ve got the debt paid off, it’s important to continue healthy financial habits, or else you’ll end up right back where you started.

How can I consolidate my debt with Ascend?

Personal Loan — This will allow you to pay off all your outstanding loans immediately and move your debts to one lower-interest loan. As a member of Ascend, you have access to personal loans with low fees, competitive interest rates, and flexible terms.

Home Equity Line of Credit (HELOC) — Use your home as collateral to borrow up to 95% of your home’s value and lock in a low fixed interest rate.

With a HELOC, repayment terms tend to be more flexible. For instance, a HELOC from Ascend can give you terms between 3 and 10 years, ensuring you get a payment that fits your budget.

Balance Transfer — Move your debt to a new credit card with a lower interest rate.

Ascend has great credit card options with a fixed rate to help keep your monthly payment low. That will allow you to put more funds toward the debt than interest paid. The disadvantage with putting more plastic into your purse is that you may rack up a new credit card bill and increase your debt.

With these strategies, you can help accelerate your journey to become debt-free. However, when evaluating your debt consolidation options, assessing interest rates, fees, and repayment terms of both your existing debts and potential consolidation is crucial. Additionally, maintaining discipline to avoid accruing new debts while repaying is essential to ensure a successful debt consolidation strategy. Consulting with a financial professional can give you the insights you need to make an informed choice. Still have questions about debt consolidation? Let us help. Visit your nearest Ascend location or give us a call at 800-342-3086.

Suggested Stories