Ever feel like your debt is difficult to manage? You're definitely not alone.

It's easy to turn to credit cards to make ends meet (or even to get a bit carried away buying holiday gifts). But debt grows quickly, and dealing with all those payments, high-interest rates, and monthly statements can feel overwhelming. Fortunately, debt consolidation may offer a solution.

The New Year is the ideal time to take a look at debt consolidation — especially if you've gone on a holiday spending spree! When you're ready to take control of your finances, here's what you need to know about the advantages of debt consolidation.

What is Debt Consolidation?

Debt consolidation takes multiple credit cards or loans and consolidates them all into one loan. One loan means one payment, which is much easier to manage.

Here's how it works. Imagine you have three credit cards:

• Credit card A has a $2,000 Balance and a 19% APR
• Credit card B has a $1,500 Balance and a 24% APR
• Credit card C has a $3,500 Balance and a 21% APR

Together, the balances on these three cards total $7,000. But even more significantly, all of these cards have high-interest rates. That means you may be paying off that balance for a very long time.

Why? Because if you make minimum monthly payments, most of those payments will go toward the interest, not the principal... and the balance remains mostly unchanged.

A consolidation loan will wrap all the credit card balances into one loan with one monthly payment. In a nutshell, you can simply transfer all the loans into one, making your finances much easier to manage.

Consolidation loans aren't just for credit card debt. You may be able to consolidate debt from:

• Medical expenses
• Unsecured personal loans
• Credit lines opened when first starting to build credit
• Payday loans and other lending products with high-interest rates

And speaking of interest rates, the credit union can work with you to open a Personal Loan at a lower interest rate. That means just one loan to repay with one set monthly payment and term limit.

Best of all, instead of making monthly minimum payments on multiple cards, you'll be able to pay off the new loan balance faster with set repayment terms, while eliminating excessive interest payments.

Consolidating debt — especially after the holidays — is a great way to get your finances under control as you head into a new year.

We’re Here to Help!

Whether you feel like you're drowning in debt or you simply want to take control of your finances, we're here to help!

A consolidation loan offers a way to simplify your current debt load, wrapping multiple payments and high-interest rates into one easy-to-manage loan with a lower interest rate.

To learn more about whether debt consolidation is right for you, give us a call at 202-479-2270 or email us at members@agfed.org.