Even just one outstanding Debt is a headache that can drag down your credit rating and make it tough to get a loan for a home or a car. Having several outstanding loans is even worse, as it can be difficult to keep track of payments and due dates, which makes it easier to miss a payment and thus damage your score even further. Also, the multiple interest rates can quickly escalate.
If you owe multiple outstanding debts, it might be time to consider looking into a Debt Consolidation loan.
“Debt consolidation essentially means combining and downsizing debts so they are easier to repay. It just means getting all debts ‘under one roof’ and at a good interest rate,” says Joseph Toms, president and CEO of Freedom FinancialAsset Management. “For someone with credit card accounts bearing high interest rates, a Debt Consolidation Loan allows them to take out one new loan that has a lower interest rate than their credit cards, and use the proceeds to pay off all the high-interest accounts, and then have just one payment a month with the new debt consolidation loan.”