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The Benefits of Consolidating Debt Before the Holidays

As the holiday season creeps closer, so does the anticipation of festivities and family gatherings. However, this time of year often brings its own unique set of financial challenges. Buying gifts, travel expenses, food preparations, and more can strain even the most carefully crafted budgets.

The last thing you want is financial stress to suck the joy out of the holidays. One strategy that can completely change your outlook for the holidays and the new year is debt consolidation.

What is Debt Consolidation?
Debt consolidation is the process of combining multiple credit cards or loans into one loan. The single loan structure typically has a lower interest rate - ideally much lower than the rates you currently pay on each separate account. Think of it as combining your smaller money problems into one big solution!

Combining all your debts into one loan means you’ll only have to worry about one payment. Instead of making multiple monthly payments to various lenders, you will only have one monthly payment. Debt consolidation simplifies your finances and makes it much easier to manage your debt. 

How Does Debt Consolidation Work?
Let’s say you have the following loans and credit cards, each with different balances and rates:

Loan: Balance: Interest Rate:
Credit Card #1 $5,000 18% APR
Credit Card #2 $3,000 20% APR
Personal Loan $7,000 15% APR





Your total outstanding balance equals $15,000.

The high-interest rates on these credit cards and loans can make it challenging to pay off the balances in a timely fashion. However, by consolidating these three debts into a lower-rate personal loan, you’ll instantly save money and only have one payment to manage. This process also helps eliminate debt faster when compared to making minimum monthly payments on credit cards.

The Benefits of Consolidating Debt Before the Holidays

Debt consolidation has many advantages, but doing so before the holidays is an excellent strategy to keep spirits high and head into the new year on the right financial track.

  • Enjoy one payment: Instead of juggling multiple payments with different due dates and minimum amounts, you can enjoy the convenience of just one monthly payment and due date.
  • Pay less interest: In most cases, the new loan will have a much lower interest rate than the rates you previously paid. Plus, this will reduce the total amount of interest paid over the life of the loan, saving you a lot of money in the long run!
  • Benefit from fixed terms: A consolidation loan will have a fixed repayment term, which means you know exactly when you’ll be debt-free! The ability to plan your finances into the future will provide you with peace of mind.
  • Reduce financial worries: The holidays can be stressful, with all the hustle and bustle of trying to get things done in time. Remove financial woes from the equation and enjoy less stress without worrying about multiple balances and payments.
  • Avoid accumulating excessive holiday debt: By consolidating all your debts before the holiday season, you’ll have a clearer view of your entire financial picture. The clarity of taking control of your finances will help you avoid the trap of accumulating more debt during the holidays.
  • Easier budgeting for holiday expenses: There are many expenses associated with the holiday season, including getting gifts for everyone, paying for travel, buying groceries to prepare holiday meals, and so much more. By knowing exactly where your finances stand after consolidating your debt, you’ll see what you have available for your holiday budget. You can ensure you stay within your limits without adding extra financial obligations you’ll have to worry about later.

We’re Here to Help!
Keep your holiday spirits high this year by taking control of your finances. Debt consolidation allows you to wrap multiple payments and high-interest rates into a convenient and affordable package – think of it as an early present for yourself!

If you’re interested in learning how a debt consolidation loan could benefit you, we’re ready to help. Please stop by the Credit Union or call 410-687-5240 to speak with a team member today.

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.