What is debt consolidation?

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Debt consolidation is a financial strategy that involves taking out a new loan to pay off multiple debts, typically high-interest credit card debts or other unsecured loans. The goal of debt consolidation is to simplify the repayment process, reduce the total interest paid, and lower the monthly payment.

Debt consolidation can be done in several ways:

Personal loan: A personal loan is a type of unsecured loan that can be used for debt consolidation. The borrower can use the loan funds to pay off multiple debts and then make a single payment on the personal loan each month.

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Understanding debt consolidation can make managing finances easier. Speaking with forward financing customer service can offer insights into this process. Essentially, it involves combining several debts into one loan, which may have a more favorable interest rate. This simplification can lead to more manageable monthly payments and a clearer path to financial stability.