A debt consolidation loan is a loan that you take out to pay off your multiple debts so that after, you only need to pay a single loan. It basically brings them all together in to one making your debts much easier to pay off since you only need to think of one payment a month.

Getting your debt consolidated could mean a new life free of debt but not if you don’t take care of your monthly payment. Today, we thought it might be a good idea to talk about the advantages you get from getting a debt consolidation.

1. Makes multiple debt payments manageable

Debt consolidation turns multiple payments into one single payment which makes it much more manageable. Imagine only having to think of one payment every month instead of stressing over several debt bills. It certainly minimizes the stress and makes you less likely to miss payments.

2. Reduces stress

Money causes stress. Multiple places calling you about money that you owe is stressed multiplied. You don’t want that in your life. If anything, you might just even acquire more debt from spending so much on food, vices, shopping, or whatever you consider as stress-relief. Debt consolidation makes your life easier

3. No need to deal with pesky creditors

Having multiple debts means you never have to be lonely because creditors will not stop pestering you until you pay off all your debts. Debt consolidation takes all of that away by negotiating with your loan companies so you only have to take care of one. After that, you won’t have to deal with those annoying debt collectors anymore.

4. Improves your credit record

Because creditors officially stop bugging you after you fix your finances, your credit begins to improve. You can only go up from here. Take care of that single payment every month and your credit record will take care of you. This isn’t a pass for borrowing even more money though. It just means you get another chance at managing your money more responsibly this time. Try to consult companies such as Debt Fix if you plan on consolidating your debts.

5. Long term financial health

After you pay off your debt consolidation loan, you can now start anew with your life, debt-free with a good credit score. Provided you curb your bad spending habits; you won’t be needing another debt consolidation now that you know better.

Hopefully, these give you enough reason to choose debt consolidation loans thoughtfully and not see it as another way out to spending more money which means more debt for you. You don’t want that added stress in your life.

Take your time in choosing a debt consolidation company. Pick a non-profit, licensed organization that offers reasonable interest rates. You’re already in a bad enough financial situation when you have multiple debts. You can mitigate the problem by picking an ethical organization that genuinely wants to help you get out of debt.

Remember that not all debt consolidation companies will accept you. It will depend on how much you need and how good your credit history is. Don’t send out too many applications otherwise you run the risk of ruining your credit history even more. Only apply for a few select ones that you qualify for.

The beauty with debt consolidation is that it simplifies your finances and forces you to commit to long-term payments. If you have many debts to pay and the bills, creditors, and payments are too much to handle, then a debt consolidation loan may be the best option for you.

What other advantages can you think of when getting a debt consolidation? Let us know in the comments.

Are you looking to shave a few hundred bucks off your monthly expenses? Though there are plenty of ways you can save money, such as clipping coupons and searching for sales, what we fail to realize is that our spending habits are completely under our control. Though there are things you can’t go without, if you take a thorough look at your spending patterns lately, you’ll probably find a few things that you’ve been doing wrong.

By nipping bad habits in the bud you can save more money and improve your financial status. Here are a few things that we realized we needed to change:

1. Not Budgeting – There was a time when I hated budgeting. The very idea of having to sit down and determine what needed to be paid and how much money I had to pay it was daunting. So we didn’t budget. The problem with this is that we were haphazardly spending money and had no idea where it went. Budgeting allows you to track your finances while also pointing out areas where you can save.
2. Ignoring Calls from Bill Collectors – No one wants to hear that they have a past due balance – especially when you don’t have the means to pay it back. Naturally, you make the assumption that if you ignore the bill collectors long enough, they’ll disappear (along with the debt). The truth is, ignoring them only makes the problem worse. The longer a bill goes unpaid, the more fees are tacked on which could easily drain your budget. If you’re experiencing tough times, inform the bill collector of this and find out if there are other options for paying off the debt.
3. Not Comparison Shopping – I know I’ve been guilty of this more times than I can count. You make an impulsive purchase without comparing offers. For instance, for the past year we were paying more than $150 a month for cable and Internet services. Little did I know that with a bit of comparison shopping I could have found Direct TV deals that include television and Internet services for a fraction of the cost. Comparison shopping can save you a great deal of money so always do your due diligence prior to making a purchase.
4. Failing to Keep up with Maintenance (car and home) – Another weak area for us was maintenance. I was guilty of waiting until the last minute to have the car, heat, or air conditioner serviced. As a result, we ended up having to invest in new appliances and a new car a lot sooner. Not to mention the fact that maintenance and repair costs were a lot more. Staying on top of maintenance on your car and your home will ensure that you get the most value out of your belongings before you need to replace them.
5. Eating Out Too Much – I don’t know how many times I’ve been so busy that I would take the kids to a fast food restaurant for a quick bite to eat. In my mind they were ordering from the dollar menu so it couldn’t be too expensive. Well, if you’ve ever checked your bank statement at the end of the month, those dollars start to add up. Prepping meals on the weekend is often an easier way to save money.
6. Using Any Old ATM – I was a member of a bank that didn’t have many branches near my home, so I’d simply withdraw funds from any ATM near me. The problem with this is that there are ATM fees involved. According to Bankrate, the average ATM fee in 2013 was about $3. If you add to that the out-of-network fee your bank charges (ours was $1.95 per transaction), you’re looking at a total of $4.95 every time you withdrawal funds from your account. You may not think this adds up to much, but if you’re like me and take funds out once or twice a week, you’re looking at a whopping average of $20-$40 a month just in fees.

I guess you could say you live and you learn. However, when I actually took the time to evaluate my spending, I was able to find ways to cut back and save hundreds of dollars each year. If you’ve been making any of the same mistakes as me, it’s probably a good idea to correct it. The better you are at handling your finances, the more peace of mind you have. More importantly, the better example you can set for your children.