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Millions of Americans live with substantial debt, which keeps them from being able to live the lives they imagine. Debt is a crippling problem for many, and the amount of debt each family lives with varies. Student loan debt, credit card debt, and other loans mean families are paying thousands of dollars in interest every year, and it’s money they could use to pay for the college education of their children, to pay off their mortgage faster, and even to live without so much fear of financial downfall.

Debt is a serious problem in the United States, and there’s very little many Americans feel they can do about their debt. Making payments is difficult. It’s not easy to spend money on debt when very little is left over for everything else. That’s why so many Americans turn to debt consolidation loan companies to help them with their finances. Anyone considering credit or debt consolidation should take their time to understand what it means and how it will help their families in the future.

Take What You Need

Debt consolidation leaves many feeling as though they can afford more than they can. It means they take what they’re offered rather than what they need. All this does is put families further into debt. Assuming you have $20,000 in debt you’d like to pay off, you’d consolidate $20,000. If you accept a loan offer of $30,000 and pocket the other $10,000, you’re further in debt with your consolidation than you were before you made this decision. When it’s time to consolidate, don’t do the unthinkable and take out more than you already owe. You have a debt to yourself to pay off your debts without incurring even more.

It Might Be More Expensive

Depending on interest rates and how long you take to consolidate your loans, you might pay more over time than you would just paying them off as you are. The math is complex for each individual, but don’t allow a simple interest rate to confuse you into thinking you’re automatically saving money with consolidation. If you could pay off your debts in three years at the rate you’re going but need eight years to pay them off with consolidation, you’re probably spending thousands of dollars in interest you wouldn’t pay otherwise. And you’re in debt five years longer.

Understand Fees

Fees associated with the best debt relief programs are oftentimes substantial. Your job is to find a way to do the math and figure what’s more cost-effective for you. Do you have a chance to pay off your loans without fees by leaving them as they are, or do you need to consolidate? The fees are often too expensive for families to pay and send you spiraling further into debt. If you cannot afford to do that, you cannot afford to take out a consolidation loan.

Your Credit

Your credit score is another substantial factor. If you don’t have good enough credit to apply for a traditional consolidation loan, you leave yourself the option of working with debt consolidation companies. This requires ending payments to your creditors, affecting your credit negatively, and spending time paying off debt that’s now causing you further credit damage. If your credit isn’t very good, it might not be the best idea to consider consolidation as a way of protecting your financial future.

Debt consolidation is always different depending on the person who is looking into it. Not all debts are created equally, which means not all consolidation loans are created the same way. Some people save and end up out of debt as a result. Others aren’t able to get through their debt repayments without incurring more debt. Spend every dollar to pay off debts, forgo the fun things in life now so you can enjoy them more later, and spend any unexpected funds you receive on paying off your debts. It’s a lot of work now, but it’s worth it when your bills are paid and you’re able to walk through life without worrying about your finances ever again.