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Debt Consolidation - What You Need To Know

Debt consolidation rolls multiple debts, typically high-interest debt such as credit card bills, into a single payment.
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Debt consolidation might be a good idea as it can help you reduce your total debt and reorganize it so you can pay it off faster.

If you’re dealing with a manageable amount of debt and just want to reorganize multiple bills with different interest rates, payments, and due dates, debt consolidation is a sound approach.

Is debt consolidation a good idea?

Debt consolidation is a good idea in several circumstances, such as when:
  • You have a lot of debt. Typically, debt that can be repaid in less than a year may not be worth the cost or credit hit of taking out a debt consolidation loan.
  • Your income is enough to cover monthly debt payments. If you’re struggling to meet debt payments, it may be best to pause on debt consolidation until you have more cash flow.
  • You’re ready for a long-term financial change to avoid further debt. If you’ve taken steps to assess your financial picture and plan for a different future, you’re on the right track with debt consolidation. But those who haven’t yet committed to working toward a debt-free future could find themselves in more debt once a consolidation loan frees up credit cards.

How to consolidate your debt:

There are a couple of ways to consolidate debt, most of which concentrate your debt payments into one monthly bill.
  • Transfer your debt to a single credit card: Consolidate all of your credit card debt to just one WyHy VISA Credit Card. With our low-interest rate, no transfer fees, and chip-enabled credit cards, you receive flexible rewards without the annual fees! We also offer several security options.
  • Get a fixed-rate personal loan: WyHy’s Personal Loans (also known as Signature or Unsecured Loans) can be used for any need such as large purchases, unexpected expenses, and even debt consolidation. Use the money from the loan to pay off your debt, then pay back the loan in installments over a set term.
  • Take out a Home Equity Loan: A home equity loan lets you convert a portion of the equity you’ve built in your home to cash. It’s also an effective way to consolidate debt and eliminate those high-interest credit card and loan balances sooner.
Use our debt consolidation calculator to see whether or not it makes sense for you to consolidate.

How to make sure your debt consolidation is successful:

Whichever debt consolidation method you choose, the most important step you can take is to maintain a positive payment history by making all your payments on time. Success with a consolidation strategy requires the following:
  • Your monthly debt payments (including your rent or mortgage) don’t exceed 50% of your monthly gross income.
  • Your cash flow consistently covers payments toward your debt.
  • If you choose a consolidation loan, you can pay it off within 5 years.

Remember WyHy Advisors are a great resource!

For many people, consolidation reveals a light at the end of the tunnel.

When considering a debt consolidation loan, the value of working with someone who has your best interest in mind cannot be understated. Our Advisors will take the time to listen and diligently work through the process to help you gain the financial independence you deserve. We’re with you!