Why a debt consolidation loan makes sense this May
May marks the unofficial start of summer, but this year, it may also be a smart time to reconsider your financial health. April, after all, was marked by a variety of economic news, ranging from the positive (a lower inflation rate) to the negative (volatile stock market performance). It was the latter development, however, that hurt the savings of millions of Americans — and left borrowers who were already in debt in worse financial shape than they started.
Fortunately, there are multiple debt relief options available for borrowers, with a debt consolidation loan being one of the most timely right now. These loans, offered by debt relief servicers and by personal loan companies, typically come with much lower interest rates than borrowers currently have with credit cards or personal loans. Because of this, borrowers can consolidate their debt at a lower cost and in a more manageable way by making one monthly payment versus multiple ones. But the benefits of a debt consolidation loan are both timeless and timely if applied for this May. Below, we'll break down three reasons why a debt consolidation loan makes sense for the upcoming month.
See what debt consolidation loan rate you'd be eligible for here.
Why a debt consolidation loan makes sense this May
Here are three reasons why a debt consolidation loan could be the right move for you this May:
Your interest rates are high
The good news is that the average credit card interest rate has dropped slightly in recent months. The bad news is that it still hovers around 20%, just under the 23% record high it hit last fall. So if you have credit card debt, you're likely paying more to maintain it than you ever have before. Not only will that make it even harder for you to pay down what you owe, but if you're making minimum payments only, it can easily lead to a debt spiral that will be impossible to break free of without help.
With your interest rates this high, then, it makes sense to turn to a debt consolidation loan. The average personal loan interest rate is around 12% now, almost half of what credit card rates are. But you may be able to find a rate even lower than that by shopping around or by using a debt relief servicer who can help by working with a lender on your behalf. Just don't wait too much longer to act, as your outstanding debt will only grow with compound interest.
Get started with a debt consolidation loan here.
Rate relief appears delayed
There was high anticipation toward the end of 2024 that this inflationary cycle was coming to an end and that the Federal Reserve would therefore continue the interest-rate cut campaign it started in September 2024 throughout 2025. And while rate cuts are still possible for later this year, they haven't materialized in the opening months of 2025, nor is a rate cut expected for when the central bank meets again in May.
This delay in rate relief won't help those already struggling to manage their debt load. And even if rate cuts are eventually issued again, they're likely to be issued incrementally, in small quarter percentage point amounts, adding up to little difference in what you already owe. Understanding this unfortunate reality, then, borrowers may be better served by moving ahead with a debt consolidation loan in the interim.
Your financial health has deteriorated
It's possible that even amid inflationary concerns and above-average interest rates you were still able to keep pace with your debt, or in some circumstances, stay ahead of it. But that may no longer be the case going into May 2025. If your investments and savings took a hit amid wider uncertainty in recent weeks, you may not have the financial buffer you had to start the year. And if your financial health has deteriorated to a significant degree, then hoping for a change won't be as advantageous as making one with a debt consolidation loan. So start by taking a realistic look at your financial situation and then speak to a debt relief specialist who can advise you on your next steps.
Chat with a debt relief specialist here now.
The bottom line
It's never too early or too late to improve your financial situation. But if you're suffering from high-rate debt, this May could be an optimal time to get started with a debt consolidation loan. With interest rates on items like credit cards hovering near a record high, rate relief delayed at least until June and the reality of deteriorating financial health in the meantime, many borrowers would benefit from exploring their debt consolidation loan options right now. By doing so, they can finally start the delayed work of regaining their financial independence.
