How to Cut Debt in Half & Pay One Bill Per Month

When you owe money, you are paying interest in addition to the money that you borrowed, which means that your debts actually cost you a lot more. The higher your interest rates, the more money you end up spending overall. Through debt consolidation, you may be able to cut debt in half and pay one bill per month, especially if you significantly reduce the interest rates on the loans you are repaying. While your monthly bill may not be half of what it was, the overall cost of the loan is significantly reduced.

Instructions

1

Gather all your debt statements. You won't be able to consolidate recurring payments, such as your cell phone or electric bill, but you can consolidate larger debts, such as your credit cards.

2

Add up your total debt. With all of your debt statements, you have a good picture of how much money you owe. Add these to find out how much money you'll need for debt consolidation.

3

Evaluate your debt consolidation options. If you're a homeowner with equity, a home equity loan is a natural first choice. It will be the cheapest option. If you don't own your own home, you may be able to borrow from your retirement accounts to consolidate debt or get an unsecured loan. You also may be able to transfer your debt to a new credit card with a low rate on balance transfers, depending on how much you owe. All of these options have risks, however, so weigh your options carefully.

4

Apply for a loan. Depending on the repayment method you've chosen, fill out the necessary applications and paperwork to secure the loan.

5

Pay your new monthly bill. Be sure to make payments on time to improve your credit score.