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According to CNBC, the average American has nearly $38,000 in personal debt, and that doesn't include mortgages. For most people, this breaks down into a combination of credit cards, medical bills, and installment loans — like car payments. If the constant shuffle of trying to figure out what's due when is causing you stress and making you feel overwhelmed, consolidating your debt can be a great option to take control of your finances. Here's why.

It Saves You Big Money on Interest

When you consolidate debt, you can often get a lower overall interest rate than what you're currently paying. This means that you can save hundreds or even thousands in interest, even if you have to pay a fee for the consolidation. This is especially true if a large portion of your debt includes high-interest credit cards. To save the most money, take a look at your current interest rates and compare them to several different consolidation offers to ensure you're getting the best deal.

It Gets You Out of Debt Faster

While making the minimum payments on your credit cards and other debt gives you more money in your monthly budget, it also keeps you in debt longer. Paying just the minimums on your credit cards — and assuming you don't charge anything else while you're paying them off — can take some people 7-10 years to pay off. When you consolidate your debt, you usually take out one larger loan that covers all of your debt payments, but it's for a specified time period. So at the end of 3 years, 5 years, or whatever the term is, everything is paid off.

It Helps You Get in Control of Your Payments

Having to make multiple debt payments every month can be difficult. They're usually all due on different days, and it can be a challenge to keep them straight. And if you do accidentally miss one, it can mean a big jump in your interest rate and lots of fees. Debt consolidation lets you move all of your monthly debt payments into one lump sum, so there's now only one payment every month to keep track of. In some situations, you may even be able to talk to the financial institution and pick the due date for the payment, so it's at the most convenient time for you.

It's Not Just for Credit Cards

While debt consolidation can be an excellent choice for people who have a lot of credit card debt, it's still a beneficial option for those who don't use plastic cards. If you have medical bills, car payments and other miscellaneous payments for things like laptops, debt consolidation can still help you get a better handle on your debt, while feeling more in-control of your financial situation.

If this sounds like something that may be right for you, Best Financial has specific programs that make it quick and easy to consolidate debt. They can help explain what debt consolidation is and what it can do for your particular financial situation, to help you get on-track — and stay out of debt.

Sources:

https://www.cnbc.com/2018/08/20/how-much-debt-americans-have-at-every-age.html