Debt consolidation is a term being used abundantly today. But, who is debt consolidation for?

There is a range of scenarios that someone may find themselves in, where debt consolidation could be a beneficial debt solution.

Let’s take a look at what some of these circumstances could be.

Debt consolidation: what is it?

Debt consolidation is the process of streamlining your multiple debts (such as credit cards, personal loans or store cards) into a larger, single debt.

This makes it easier to budget and schedule repayments; and can save you money, with a lower interest rate and the removal of the numerous sets of fees and charges that come with having multiple creditors.

But, who might consider debt consolidation?

The graduate

This person has spent the first five to ten years of their adult life studying and accruing hefty student debt.

Due to the long hours spent poring over the textbooks, their ability to earn a solid income was stifled. Eventually, the attraction of having a credit card to help with cash flow became too high.

One becomes two, and added to their student loans, the graduate finds themselves with a degree (or two) but unable to meet their monthly repayments.

The married couple

This couple met as young adults, and they quickly decided they want to be together forever.

Without savings, they decided to take out a personal loan to pay for their wedding. A couple of years later, their repayments started to fall behind because along came baby, meaning they were down to one salary.

Unfortunately, these payment defaults landed this couple with a bad credit score.

The flatmate

Renting, servicing a car loan, repaying then spending then repaying their credit card again, and trying to juggle paying their share of the household bills, groceries – as well as their phone and internet plans – the flatmate is quite frankly overwhelmed with the sheer volume of expenses they are responsible for.

The single parent

Recently single, this mum or dad is looking to reduce expenditure wherever they can.

Now’s the time for them to tighten the belt and shed any excess outgoings to get through this period before they get back on their feet after such a big life change.

The fledgling entrepreneur

This person put all their savings towards a business venture, which unfortunately hasn’t broken even yet.

The bills haven’t stopped coming in though, and the entrepreneur is trying to keep their head above water and maintain some semblance of a comfortable lifestyle without having to resort to bankruptcy.

What do all these personas have in common?

Each of these scenarios depict a person or people who aren’t coping with their current multiple debts and are looking for a way to regain control of their finances.

Though everyone’s financial situation is unique, all of these individuals could consider a consolidation loan as a way to find debt relief.

A debt consolidation loan can secure you a low-interest rate, a single, fixed periodic repayment, and an end date – light at the end of the tunnel.

When paired with a realistic budget and healthy spending and saving habits, each of these personas could freeze the debt spiral they are in.