When committed couples find themselves wading in a quicksand of debt, the value of a lifeline cannot be understated. Excessive debt strains relationships and reduces the quality of life. Rather than continue to spin your wheels while sinking deeper into financial stress, there comes a time when family members need to have a heart-to-heart talk about finding a solution. One of the tried-and-true strategies couples employ involves consolidating debt by bringing one or more of their accounts under one roof at a lower interest rate. Following this strategy, couples can apply for a debt consolidation loan to regain their financial health and the emotional well-being that comes with it.
Relationships are built on trust and honesty, and financial transparency about the fact you’re falling behind tests both of those qualities. It’s not unusual for couples to separate household responsibilities with one taking the lead on bill paying and money management. After a period where the incoming revenue doesn’t quite keep up with living expenses, credit card bills, and other debts, it’s time to sit down at the table and talk solutions.
One of the things families find helpful is putting the amount of regular expenses that occur monthly down on paper. Creating a list and tallying the total cost of monthly expenses provides a concrete reference point for your partner to review and gain a working knowledge of your financial situation. Don’t be surprised if your partner has questions that involve “how” you got behind. Those questions may be driven by emotions as much as knowledge gathering. Once things settle and both of you understand some type of debt consolidation loan is in order, you can begin the resolution process together. The following recommendations are things couples often find useful.
To qualify for a reasonably low-interest joint debt consolidation loan, both of your credit scores will likely come into play. Lenders use credit scores and repayment histories to understand the level of risk they are taking when approving loan products. Low credit scores typically indicate higher risk. That’s why couples may want to secure a free copy of their credit report from each of the three major bureaus — Equifax, Experian, and TransUnion – first. Next, couples should aim to tidy up any blemishes and try to improve their individual scores as much as possible. Keep in mind that both scores impact joint debt consolidation loan opportunities.
While many couples go into the debt consolidation loan process to improve their financial health, divorce is not completely unheard of in these situations. That being said, the debt consolidation loan is not necessarily one person’s or the other’s if you decide to part ways. The agreement you sign with a lender makes you both legally responsible for making monthly installments. Those are reasons why couples may want to only include marital debts for consolidation and not items that were accumulated prior to the marriage, such as student loans.
Debt consolidation involves moving multiple monthly payments under one umbrella. The idea is that by leveraging a loan solution that pays off accounts charging higher interest and fees, consumers save money. Along with long-term family savings, couples can also lower monthly expenses and breathe a sigh of relief. Although there are a variety of loan products for this purpose, the following rank among the most popular and effective solutions.
Using a debt consolidation calculator in conjunction with a budget featuring monthly expenses can help clear any uncertainty and estimate potential savings. After running the numbers with potential debt consolidation loan options, simple solutions often come to light.
When working through a potentially emotional discussion about financial hardships and solutions with your significant other, it’s important to understand this is not all about money. Your relationship is likely based on love, happiness, values, and planning a rewarding life together. That’s largely why there are two sides to the debt consolidation loan discussion. Quality of life remains equally important as a positive revenue stream. Consider all of the following ways a debt consolidation loan can help.
It’s certainly true that securing a debt consolidation loan saves couples money. However, money is merely a tool to purchase necessities, and saving time and stress is just as valuable.
Selecting the best debt consolidation loan to manage financial difficulties and provide long-term solutions may feel overwhelming. Most people aren’t professional accountants and even using tools such as debt consolidation calculators may come across as intimidating.
Once you have done your research and explored your options, it may be beneficial to reach out to a Loan Specialist at Consolidated Community Credit Union. Unlike traditional banks, which prioritize high-profit margins for shareholders, CCCU is dedicated to its member-owners. Whether you are interested in consolidating your debt with a home equity line of credit, a low-interest-rate credit card, or a personal loan, CCCU is here to provide the assistance you need.
For more tips on deciding if a debt consolidation loan is right for you and your partner, review our "Debt Consolidation: Expectations vs. Reality" complete guide!