Reduce Monthly Payments – In most cases, a debt consolidation loan allows you to reduce your monthly payments because you’re eliminating higher interest rate payments. You get rid of all the high interest rate credit lines you currently have, and combine your debt into lower interest rate loans.

More Manageable Monthly Payments – By consolidating your debt into fewer credit lines (ideally 1), you get rid of several credit cards and set up a situation that allows you to pay 1 large payment to 1 creditor. Instead of paying bills at different times each month, you’ll most likely only pay 1 bill, 1 time each month. In some cases, you may discover a program that allows bi-monthly payments; this allows you to pay less in interest over the life of the loan because you decrease your balance two times per month; a plan that allows bi-monthly payments will make a huge difference over the life of a loan.

Fewer Credit Lines – By getting rid of balances on several different credit cards and other lines of credit, you can start canceling credit lines that you no longer need. In most cases, this is viewed positively on your credit score because you have fewer accounts open and usually access to less credit. Creditors won’t worry as much about you getting further into debt because your available credit is decreased overall.

It’s Easier to See Your Debt Vanish – By consolidating your current lines of credit into fewer credit lines, you have a clear picture each month of how much you’re paying off. You’ll easily be able to see that minimum monthly payments do nothing and that larger payments make a huge difference. This will help you stay focused and committed to a debt free future.

For information about developing a plan to consolidate credit card debt, see our article on Credit Card Debt Consolidation Tips.