Debt Consolidation: A Guide to Understanding the Essentials
American household debt reached a shocking $13.21 trillion in 2018. People under the age of 35 carry $67,400 in debt on average, while debts tend to peak at $134,600 between the ages of 45 and 54. Debt has continued to rise regularly year after year.
In its Quarterly Report on Household Debt and Credit, the Center for Microeconomic Data revealed that Americans saw a rise of $198 billion in household debt, or 1.4%, during the last quarter of the year in 2019. Mortgage originations went up by $224 billion, or 42%, in 2019, taking this debt ratio to the highest it’s been since the fourth quarter of 2005. Debts for education also make an impact. The fourth quarter of 2019 saw at least $10 billion in student loans.
Looking at those numbers, it’s easy to see how you could quickly get in over your head with debt and have trouble paying your bills, especially if you lose a job, get hurt or have to deal with other unexpected circumstances. One thing that can help is to use debt consolidation methods to reduce your payments and interest rates. Consolidation isn’t right for everyone, but it can be a good way to get back to making payments on time and having money left over to live more comfortably each month.
This article covers everything you need to know to help you decide if debt consolidation is right for you.