Debt consolidation involves combining the debts you owe into a single monthly bill. There are a few ways to do this, such as taking out a balance-transfer credit card or a loan. While this solution can benefit many individuals, here are the most appropriate circumstances for consolidating debt.

3 Instances When Debt Consolidation Is a Good Idea

1. You Have a Moderate to Good Credit Score

Consolidating your debt may leave a mark on your credit score, but staying in debt is bad for your credit. If you have moderate to good credit, debt consolidation is often a wise choice. It will likely make you eligible for a 0% APR credit card or low-interest loan, which will allow you to pay off your debt with as little added cost as possible.

2. Your Income Will Cover Your Payments

Debt consolidation organizes the debts you owe into one convenient payment, but you’ll still need enough money coming in to make the payment. A debt calculating tool can help you determine what type of payment you can realistically make each month. It’s also a good idea to work with an expert who can help you avoid hidden fees.

3. You Have a Plan to Stay Out of Debt

Before you begin paying off existing debt, you must first ensure you have a plan to avoid putting yourself in more debt. Your credit card or loan will require payments, but in addition to those, other monthly bills and circumstances may arise. Make sure you have enough of a buffer to cover your financial needs.

If you’re seeking professional guidance to help you navigate debt consolidation, turn to Donald L. Spafford, Jr., Attorney at Law. As a debt specialist with over 30 years of experience, he helps Honolulu, HI, residents and businesses navigate financial issues with expertise and unwavering support. Browse through the firm’s solutions online, or call (808) 532-6300 to schedule a free consultation.