Priority Plus Financial on How Consolidating Your Debt Can Help You Relieve Stress
If there is one thing the pandemic taught everyone, it’s that having massive amounts of debt can lead from one bad thing to another. With everyone looking for multiple ways to survive this time of economic uncertainty, it’s no longer surprising that people have huge amounts of credit card debt lined up behind them too.
This year 2022 is particularly unkind to people with massive credit card debt. According to a report just released this month, more and more people rely on credit cards for necessities. Interest rates on credit cards are exponentially high; consumers with a $5000 credit balance will need to pay around $1000 extra for interest in one year.
Priority Plus Financial knows how stressful it can be to have huge amounts of debt on one’s back. It’s both frustrating and worrying at the same time. This can lead to mental stress and it’s not going to get any better because of the pandemic threat. And the more people think about debt, the more it stresses them out which may result in full-blown depression!
Mental stress causes low self-esteem, lack of sleep, and impaired cognitive function. A person is rarely able to cope up with stress when there’s a huge amount of debt looming over one’s head. When one has a huge credit card debt, the person is responsible for paying the debt over time. Imagine the stress this can bring to a person who is unemployed because of the financial woes companies nowadays must endure because of economic issues. Every month, the person will have to worry where to get the money to pay for the credit card debt.
It also doesn’t matter for credit card companies to wait until the debt is completely settled. They’ll simply just take their time, gaining profit thanks to exorbitant credit card fees!
Therefore, financial institutions believe that debt consolidation can help those who are struggling in paying credit card debts. This is because debt consolidation gives a person the ability to pay credit card debt by taking out a huge amount as a loan. This loan will then be used to pay for the entire debt amount with a one-time payment. This way, the credit card debt is paid. Sure, there are still payments to be made, however, debt consolidation loan payments are manageable because the interest rate is agreed upon by both parties.
If one thinks about how debt consolidation loans work, it may feel like you are just borrowing more money and slowly paying your credit card debt monthly may seem like the easier option. Unfortunately, credit card interest rates can also change depending on what happens to federal interest rates. So, if your credit card interest rate goes up, one will find themselves having a hard time paying the debt monthly or ever being able to pay them off at all.
With debt consolidation, repayment usually comes with a fixed interest rate and schedule. The only thing one needs to do is to estimate how long it will take to pay for the consolidation loan and the interest rate placed.
For those things, you can talk to a financial institution that can give you many options for debt consolidation. Feel free to talk to Priority Plus Financial for a consultation on debt consolidation!
