Paying off debt could save you thousands

Financial analysts are urging Americans to pay off their high-interest credit card debt. The reason? Credit card debt may cost you and your family thousands of dollars in interest if you only pay your minimum balance each month.

It is estimated that the average family carries approximately $10,000 in unsecured debt. Unsecured debt includes anything from personal loans and store tabs to credit cards. We all need to take advantage of unsecured credit sometimes, but with unsecured debt come extremely high interest rates.

You may wonder why your mortgage interest rate hovers around 6 percent while your credit card rates are near 29 percent. The reason is simple. If you default on your mortgage payments, the bank can take your house and recoup some of their loss, but unsecured debt can not be recouped if you default on your payments. This is a huge risk for lenders, and to offset that risk, they charge astronomical interest rates.

These high-interest rates do a lot to protect lenders from loss, but do nothing to help your financial situation. The truth is that if you carry a $2,000 balance on an account with a 29 percent interest rate, you could be paying nearly $50 per month in interest alone. And that is only one debt. The average household has three credit cards.

The solution is simple. All you need to do to save hundreds of dollars in interest each month is to pay off the debt. But what can you do if you can not afford to pay more than your minimum monthly balances? You can still pay off your debt with a debt consolidation loan.

By consolidating your high-interest monthly obligations into one loan you can save a great deal of money. First, you save money by getting a much lower interest rate. Second, you save money by making lower principle payments.

And getting a debt consolidation loan is as easy as applying for other types of loans. Most lenders will even take care of paying off your debts for you so you don’t have to even write a check. There really is no reason to continue to pay off high-interest debt. Turn your high-interest debt into a low-interest loan with consolidation today.