One of the services offered by HPI Financial is debt consolidation. If you are thinking about debt consolidation, but are not sure whether you want to proceed, you may be wondering what the benefits are. Let’s take a look at both the obvious and less obvious reasons to consolidate your debt.
1. Reduce your interest rate.
Perhaps the most obvious reason to consolidate your debt is to reduce the interest you are paying now. With a lower interest rate, you could end up not only saving money every month, but saving money overall if you keep the same loan term.
2. Improve your terms.
Maybe some of your loans have ballooning adjustable mortgage rates. Maybe others are bleeding you dry through penalties and fees. If you want to get away from these unfavorable terms, reconsolidating under friendlier terms is a great way to do it.
3. Extend your loan terms.
If you do need longer to pay off your debts, you can consolidate in order to give yourself an extension. Just be aware that if you do this, it does mean you will be paying interest for longer, which could add up. But if you do not have the financial flexibility to pay your loans off right away, it could be worth it to buy yourself that extra time.
4. Streamline your monthly finances.
How much time do you spend paying your bills each month? How much paperwork do you have to deal with? When you consolidate your debts, you eliminate most of that monthly paperwork, saving yourself a lot of time and effort. This can be a huge weight off, and just as important as the financial benefits you gain.
5. Reduce the mistakes you make with your payments.
If you have a lot of bills to pay each month, it can be easy to lose track and forget to pay one. If this happens, you can fall behind in your payments, resulting in added interest and fees—and possibly even a black mark against your credit score.
With debt consolidation, you no longer have so much to keep track of. It is easy to remember to pay a single bill every month. That means you are less likely to make mistakes which cost you money.
6. More clearly visualize your overall financial situation.
If you do not budget with great care, you may not actually be aware of how your debts stack up against your income. Adding up all those bills each month and doing the math can be time-consuming, tedious, and in some cases, challenging.
After debt consolidation, however, you should find the math a lot simpler. Use this opportunity to take a close look at your finances each month to see where all your money is going. This knowledge can help you figure out what you need to do in order to stabilize or improve your finances to finish paying off your debts—and hopefully bring in a tidy profit.
7. Use the time you free up to teach yourself better financial habits.
One common criticism of debt consolidation is that it does nothing on its own to teach better financial habits. While that may be true, it does give you back some time and energy each month which you can use to teach yourself those habits.
Ironically, when you are struggling financially, it can be really hard to learn to budget effectively. You are too busy just trying to survive, and you get to the end of each day feeling totally drained.
Debt consolidation can give you that break you need to finally get your financial life together and get on track for the future. Finally feeling encouraged, you can take steps to prevent debts from becoming overwhelming going forward.
8. Cut back on stress.
Finally, one benefit of debt consolidation which is impossible to quantify is the stress-relief you can enjoy knowing that you are paying less money and your debts are easier to manage. This by itself can make a major difference in your day-to-day existence. Less stress means greater physical and psychological health, and higher quality of life all around.
So now you know a few reasons to think about debt consolidation in Redwood City. Is debt consolidation right for everyone? No—it is not a fit for every situation, but it has helped many HPI Financial customers to get their finances on track.
Please call (650) 741-9797 if you need help figuring out whether debt consolidation is right for you.