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The decision on whether or not to seek out debt consolidation as a viable option for people in debt is one that is not easily settled. In order to make this difficult choice, individuals have to look hard at their current debt situation while also evaluating the strength of their alternatives. Going through consolidation makes tremendous sense for some people. It can provide some individuals with the ability to lower their monthly payments and reduce their interest rates. For others, though, credit card consolidation is simply a shell game, letting them believe they have taken action without giving them a real solution. How should you use credit card consolidation calculators? Here’s a guide.

Calculating how much lower your interest rate will be

One of the challenges of making a decision on debt consolidation is that you are having to think about multiple credit cards on your end. What is your average rate if you have four different credit cards with different interest rates? Credit card consolidation calculators provide assistance in this regard, helping you understand where you are so you can make a good decision on whether consolidation is right for you. Unless you are a math whiz, you will probably benefit from the help of a calculator, which will give you an exact answer to a question that demands that sort of precision.

When you’re deciding whether to go through with consolidation, you’ll need to know whether consolidating the loan is worth your time. If you’re just shaving a tiny amount off of your interest rate, consolidating may not make sense. Credit card consolidation calculators are designed to give you this information so you can make the decision that is right for you.

Determining what your monthly payment will be

You may be thinking about consolidating your debt because of the promise of a lower monthly payment. If you’ve been struggling to keep up with all of the minimum payments from your different creditors, then lowering the payment can do more than just save you money. It can also help save your credit and give you peace of mind. Calculators do an excellent job of showing you exactly how much you will pay each month. You’ll see this amount and have the opportunity to compare it to what you pay currently. Beyond that, you will see how much of your payment is going to pay off the loan and how much is going to service the interest each month. If you are like most people in debt, you want more money going to your principal. Calculators break this down for you in a way that is easy to see and understand.

Consolidation is right for many people, but it is not right for every person. You can’t know whether you fall in the first category or the next until you have used a calculator to lay bare your situation. With all of the information in front of you, it will be much easier to make a determination on whether credit card consolidation is a tool that’s likely to bring you closer to financial freedom or whether it is simply a mirage that looks good in the abstract.