If you’ve ever watched your credit card balance grow each month and wondered if there’s a better way to pay off debt, we have an answer: There is, and it’s all about understanding debt consolidation. 

What is debt consolidation? 

Many Americans are carrying high-interest credit card debt. According to the Federal Reserve Bank of New York, credit card balances nationwide reached a total of $1.13 trillion at the end of 2023. Millions of people stare at their credit card statements each month, hoping to find some way to pay off their debt quickly and efficiently.

Debt consolidation is a method of doing just that. It involves taking out one personal loan to pay off multiple credit cards so that you’ve got a single monthly payment at a fixed interest rate that works for your budget. 

How does it work? 

You can often begin your personal loan application online or over the phone. That’s how many of our 1st  Franklin Financial customers begin the process. You can also sit down in person with a member of our team to go over all the details, making sure the loan is a good fit for your needs. 

Getting all the details is important. You want to know your interest rate, exactly how much your monthly payment will be, and what day of the month that payment will be due.

Once your application is approved, you can use your money to pay off your credit card debts and then you will have just one simple loan payment each month.

Could it help you? 

If you have high-interest credit card debt that’s snowballing month over month, or you’re paying off several small debts that are all charging you interest, you may be a great candidate for debt consolidation. 

It’s definitely worth exploring, especially if you’d rather have just one fixed payment with a fixed rate of interest each month rather than multiple bills to juggle. It can be comforting to know exactly how much is due every month, instead of discovering you have an unexpectedly large credit card bill due that you’d struggle to pay. 

And there’s another bonus: since we report to all three major credit bureaus, making on-time payments could help increase your credit score.

Even if you don’t have great credit and worry about getting approved for a loan, come talk with us. If you’d like to learn more about debt consolidation, the Friendly Franklin Folks are happy to answer your questions. Just give us a call or drop by your nearest branch for a quick conversation.