Many individuals plan to pay off their debts as a student but there are still those who do not succeed because of lack of real motivation and poor debt management strategy. But, the question is—would it be wise to be consolidating debt as a student?
You may have been frequently reminding yourself of the reasons you want to get out of debt-be it student debt, credit card debts and other loans. But, will paying it off while you’re still a student benefit your life? What are the things that can you do when you’re debt free that you cannot do at the moment?
If you’re weighing between consolidating your debt as a student or not, here are the pros and cons of debt consolidation that can help you decide.
Pros
Increase your credit score
It takes a while to recover from bad credit, but debt consolidation is a good way to start your way towards financial freedom. Multiple credit card debts and student debts which remain unpaid can seriously affect your credit rating, especially if you exceeded the credit limit. When your loan balances are high, the credit score plunges too. Getting a debt consolidation loan helps you become debt free and eventually raising your credit score.
Improved cash flow
When you consolidate your debt, you can either lessen your monthly payment or the overall interests of loans, or if you’re lucky, you can do both. So, it means, you have more money to enjoy, without being bugged down by a nagging thought that you have many debts to pay. When you have multiple debts, you have less money to pay for the things that really matter.
Lesser bills to pay per month
You don’t have to worry whether you owe more money or you missed out some bills. With only one consolidated loan to keep up with and pay, you only have few bills to worry about. Once you finally paid off your consolidated loan, you will only deal with fewer bills as the time goes on. You no longer have to worry about accumulating interests and late fees and charges that usually come with credit card debts and other loan obligations.
Cons
The above advantages can be its biggest consequence. You might fall deeper in debt knowing that you can pay off your debt, use up the extra cash you saved from monthly payments and then get in debt again. The vicious cycle of borrowing and consolidating may go on and on, unless you have a strategic debt payment plan to follow.
Debt consolidation for students
Do you want to borrow from your future income or pay off your debts as soon as you can? It is your choice. Debt Consolidation can offer a debt consolidation loan that lowers your monthly payments, reduces the number of your creditors and bills to pay for each month, and lower the interests of your loans. It will also give you additional cash in hand and help you face a financially secure future.