Debt Consolidation Strategies to Reduce Interest Payments
High-interest revolving debt, particularly from credit cards, often traps consumers in a cycle where minimum payments barely touch the principal. APRs exceeding 20% can lead to financial stagnation, making debt consolidation an attractive strategy for streamlining finances.
Consolidating multiple debts into a single loan or line of credit simplifies budgeting and can secure a lower overall interest rate. The key metric for success is achieving a fixed rate below the weighted average APR of existing debts, ensuring significant savings over time.
Discipline remains critical. While consolidation offers mathematical efficiency, it requires addressing the spending habits that created the debt. Lasting financial freedom depends on rigorous budgeting and commitment to long-term repayment.
