5 Smart Tools to Help Consolidate Your Debt

Between managing a career, supporting a household, and planning for the future, life can get complicated. Add in balancing multiple loan payments, and it’s easy to feel like you’re waiting for the other shoe to drop. But here’s the good news! Debt consolidation can be a powerful tool to simplify your finances and refocus on your goals.
 

Reasons to Consolidate

Move over quick fixes. This is about long-term clarity. When you’re juggling responsibilities, clutter can pose a threat to your financial wellness. Debt consolidation helps by:
 

• Combining multiple debts into one simple monthly payment
• Reducing the risk of missed payments
• Potentially lowering your overall interest rate

Tools for Effective Consolidation

Debt consolidation is not a one-size-fits-all approach. With a personalized look at your financial situation, a specific tool may rise to the top.
 

1.    Home Equity Loans

If you’re a homeowner, your equity could be a valuable resource. With longer terms available, a home equity loan can help reduce your monthly payments to a manageable amount.
 

2.    Fixed-Rate Personal Loans

You don’t have to own a home to consolidate. With a predictable repayment schedule and competitive rates, a personal loan is a popular option for consolidating high-interest debts like credit cards. Not only will you have a set monthly payment, but you’ll also know when you’ll be debt-free.
 

3.    Balance Transfer Credit Cards

Looking for a short-term strategy? If you’re confident in your ability to stick to your pay-down plan, a credit card balance transfer could be your fit. Traditionally, balance transfers come with a low- or no-interest introductory period. This could be ideal for smaller amounts you want to pay down on aggressively.
 

4.    Vehicle Refinancing

Are you paying on a high-interest loan from your dealer? Have you improved your credit score? Refinancing an existing vehicle loan (boats, campers, and motorcycles included!) may result in a lower monthly payment and interest over time. This could also be a good opportunity to combine other high-interest loans, further reducing interest and monthly bills.
 

5.    Financial Counseling and Debt Planning

BHFCU has partnered with GreenPath Financial Wellness! Members now have access to many free financial counseling services and NFCC-certified counselors. With a specific debt management focus, GreenPath is your newest consolidation tool.
 

Make the Most of Your Consolidation

Setting your strategy is just the beginning. It’s staying the course that can prove challenging. That’s why we’ve compiled a few tips to help you succeed.
 

• Review Your Debts Regularly. Understanding what you owe is the first step to making smart decisions. Make it a monthly habit to celebrate your progress!
• Avoid Taking on New Debt. Did your consolidation free up credit cards? Don’t fall back into the same cycle! Only spending what’s necessary.
• It’s Time to Automate and Organize. Set up automatic payments to pay down your debt. Consolidation works best when paired with consistent habits.
• Keep Focused on Your Goals. You know why you decided to consolidate your debt. Stay locked in on paying it down so you can start making progress on other financial goals. 

Let’s Make a Plan

You’re not in this alone. Our goal is to help you thrive by making informed choices with a personalized approach. Whether that’s debt consolidation or something else, we’re ready when you are.