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Why you should get a debt consolidation loan this June

Debt consolidation may make your debts easier to manage while saving you money.  Getty Images/iStockphoto

If you have high interest debt, you may be looking for options to eliminate it. As the cost of living continues to rise, balances with high interest rates can lead to financial hardship. One common debt relief option is debt consolidation. This typically involves taking out a new loan with a lower interest rate than the average one on your outstanding debts and using it to pay those debts off

In doing so, you may be able to reduce the monthly and overall cost of your debt while simplifying the payoff process. But it may be wise to take the debt consolidation approach sooner, rather than later. And this June could be a smart time to act. Below, we'll break down why.

Chat with a debt relief expert about your options today

Why you should get a debt consolidation loan this June

There are several reasons why it may be a good idea to take out a debt consolidation loan this June. Here are two: 

Rates could go up if you don't act quickly

Interest rates change regularly. News about inflation, the Federal Reserve, politics and other economic factors can all cause rates to rise or fall. And, if they rise, you could miss your chance to lock in a low rate on your debt consolidation loan. Higher rates could lead to higher monthly payments on your existing debts, too.

One primary driver of movement in consumer interest rates is the federal funds rate. That's the benchmark rate the Federal Reserve sets in an effort to keep inflation low and the United States economy growing. When inflation is too low, the Fed tends to reduce this benchmark rate. But, when inflation is persistently high, rate increases can become commonplace. 

And, while the next inflation report is just days away (May inflation data is being released on June 12, 2024), the most recent report showed that prices grew 3.4% year over year in April. With that inflation reading above the Fed's 2% target, the central bank could increase the federal funds rate at the close of its June meeting (taking place June 11 to June12, 2024). So, it may be advantageous to lock in your debt consolidation loan now, before the Fed has the chance to push interest rates up. 

Get the debt relief you need before rates have a chance to rise now

Debt consolidation may help you cope with inflation

High inflation is a painful reality for many. It means that prices are growing too fast for comfort. And, if you're having a difficult time coping with the increasing cost of living, high-interest debt may expand your hardship

But, debt consolidation can help. 

When you consolidate your debts at a lower interest rate, you may experience a meaningful reduction in your overall monthly payment obligations. So, paying off your high interest debts with a debt consolidation loan this June may free money up in your budget to help you cope with increasing prices. 

Debt consolidation can simplify your debt payments

With vacations and family obligations, summer is often a busy time. So it may be difficult to keep track of multiple debt payments this time of year. But a debt consolidation loan can help with that, too. 

When you take this debt relief route, you'll pay off multiple debts with a single loan. In doing so, you'll turn multiple payments into one monthly payment - which can make your debt easier to manage. 

The bottom line

Debt consolidation may provide the relief you need. And, if you're having a hard time making ends meet, you should strongly consider taking this debt relief approach this June. If you wait too long, rates could go up, which may increase the monthly cost of your current debts as well as the debt consolidation loan you have access to later. Debt consolidation can also help you free up money to cope with persistent inflation while simplifying your payoff process. Talk to a debt relief professional about your debt consolidation options now

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