Our Guide to Consolidating Debt With a Loan

At this time of year, many of us in Clark County and Southwest WA find ourselves facing a familiar challenge: the aftermath of holiday spending. If you’re looking at a stack of bills and feeling overwhelmed, you’re not alone. The good news is there’s a smart, effective way to take control of your finances and start the year off right: debt consolidation with a personal loan.

Debt consolidation offers a path to streamline your finances and potentially save money in the process. As your local credit union, People's Community Federal Credit Union offers an alternative that’s rooted in fairness, personalized service, and a genuine commitment to your financial well-being.

See how much you can save using our debt consolidation calculator here.

Let’s explore how debt consolidation with a personal loan can work for you, and why choosing a credit union might be your best move yet.

What Is Debt Consolidation?

Debt consolidation is a way to combine multiple debts, loans, or bills by taking out a new loan, leaving you with just one monthly payment to manage. It often comes with a lower payment, lower interest rate, or longer payoff terms. Consolidation can be used to combine unsecured debts like credit cards or medical bills.

Think of debt consolidation as decluttering your financial life. Juggling multiple payments, each with its own due date and interest rate, can be incredibly stressful. It’s easy to lose track, miss a payment, and end up paying more in late fees and interest. By consolidating your debts, you’re not just simplifying your finances – you’re potentially lowering your overall interest rate, reducing your monthly payment, and setting yourself up for long-term financial success.

How Does Debt Consolidation Work?

Here’s how it typically works: you take out a new loan for the total amount of your existing debts. This new loan is then used to pay off all your other debts, leaving you with just one loan to repay. But here’s how the debt consolidation process typically works with a credit union like People's Community Federal Credit Union:

1. Assessment: You’ll work with the credit union to review your debts, your financial situation, and the debt consolidation options available.
2. Application: You’ll apply for the loan that best suits your needs, often a personal loan.
3. Approval: The credit union will review your credit history and financial profile to decide if you’re approved for the loan. Here at People’s, we base this decision on the content of your credit history and not the score itself.
4. Payout: We’ll use the loan funds to pay off your existing debts.
5. Repayment: You’ll now make one monthly payment to a single lender, often at a lower interest rate.

If you currently have multiple debts, each of them likely has its own interest rate, and some of these (especially credit card rates) can be quite high. By consolidating, you can secure a lower overall interest rate, which could save you money in the long run.

There are a few options for consolidating your unsecured debt, with varying levels of risk. Some choose to get a 0% interest credit card to transfer their debts onto, so they can pay off the full balance during the promotional period before interest starts to accrue. However, this can be a risky tactic if you are unable to pay off the balance before the end of the interest-free period, at which point you may be in worse shape than before.

View our current rates for personal loans here.

People's Community Federal Credit Union’s Personal Loan for Debt Consolidation Options

When it comes to debt consolidation, one size definitely doesn’t fit all. Your financial situation is unique, and you deserve a solution that’s as individual as you are. Big banks and online lenders often use automated systems to approve loans based primarily on your credit score, which can result in inflexible terms or even loan denials for those with less-than-perfect scores.

At People's Community Federal Credit Union, we take a different approach. We offer personal loan options for debt consolidation, each designed to meet different needs and financial situations. Whether you’re looking to consolidate credit card debt, medical bills, or other types of loans, we have a solution that can simplify your finances and potentially save you money on interest. And here at People’s, we know you’re more than a number. Our lenders take the time to review the whole picture of your financial history, not just your credit score.

Remember, debt consolidation isn’t just about combining your bills, it’s about taking control of your financial future. By working with a local credit union that understands your needs, you’re choosing a partner who’s invested in your long-term financial wellbeing.

Ready to take the first step towards financial simplicity? Contact us today by giving us a call, submitting a request to speak with a representative, or visiting one of our branch locations. Let’s work together to create a debt consolidation plan that puts you on the path to financial freedom. Your journey to a more secure financial future starts here with a team that truly cares about your success.