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If you’re dealing with a significant amount of debt spread out over multiple credit cards or loans, then you may be considering debt consolidation. This isn’t a magic ticket out of debt, but if done correctly, it can save you money and help you pay off your debt more easily.

Debt Consolidation Methods

There are a few ways that you can consolidate your debt. You can obtain a loan with a lower interest rate than you currently have and use it to pay off all your debt. You can also use credit, either with a home equity line of credit or a 0-percent annual percentage yield (APR) credit card, to pay off your debt. Keep in mind that with a 0-percent APR credit card, that APR is only the introductory rate, which typically lasts for a year. If you carry a balance longer than that, the interest rate will go up, so you need to make sure you can pay off what you owe within that introductory time period.

Consolidating Debt for a Lower Interest Rate

The best reason to consolidate your debt is to pay less in interest. Instead of paying balances on multiple credit cards that have APRs between 14 and 20 percent, you can get a loan with an APR of 8 percent and save hundreds or thousands in interest per year. Or, you could transfer those balances to a 0-percent APR credit card. Keep in mind that you will need a good credit score to obtain a loan with a low interest rate or a 0-percent APR credit card.

You may also want to consolidate your debt if your current debt has a variable interest rate. Since variable interest rates increase when the market interest rate increases, you’ll end up paying more if that happens. It’s safer to consolidate your debt so you have a fixed interest rate.

Making Debt Easier to Manage

Consolidating your debt can also help you manage it better. When you have multiple payments to make, it’s easy to forget one or more and get hit with late fees. With consolidation, you’ll only have one payment to make every month. If you use a loan to consolidate your debt, you also will have it paid off at the end of the term. This is helpful if you are dealing with lines of credit, where it’s easier to keep spending and only paying the minimum, which results in debt that takes years or even decades to pay off.

Debt consolidation isn’t always the right solution. If you have a small amount of debt that you could realistically pay off within about six months, it’s better to save time and just budget properly instead. Remember that while debt consolidation can help, you’re only treating the symptom, not the underlying problem. To avoid getting back into debt in the future, you’ll need to build better financial habits and make su