STW: How I Consolidated My Debt and Finally Got Ahead
The Story
"At my lowest point, I had six different debts: three credit cards, a car loan, and medical bills. Keeping up with all the due dates and interest rates was overwhelming. I felt like I was juggling knives. So I tried a debt consolidation loan. Instead of five different payments, I had one. The interest rate dropped, my monthly payment became manageable, and for the first time, I felt like I was moving forward. Two years later, I paid it off completely and started saving again."
Advisor Breakdown
Situation:
$20,000 in total debt across multiple credit cards and loans.
High interest rates and scattered due dates.
Stress from managing multiple minimums.
👉 This is the classic “debt chaos” situation. Too many accounts, too much interest, no progress.
Task:
Simplify debt payments.
Reduce interest rates.
Create a structure that would allow consistent payoff.
👉 I like that they didn’t just aim to “get by” — they wanted a clear path forward.
Action:
Applied for a Debt Consolidation Loan
Combined all debts into one personal loan.
New interest rate: 9% (vs. 18–22% on credit cards).
This step cut costs significantly — it’s the power of lowering APR.
Closed High-Interest Cards
Stopped the cycle of using cards for new purchases.
I recommend this if temptation is a problem. But keep one account open to maintain credit history.
One Payment System
Simplified finances to one monthly bill.
Added automatic payments to avoid mistakes.
👉 From my perspective, consolidation works because it replaces chaos with structure. That mental relief alone is huge.
Result:
Reduced monthly payments by ~$250.
Paid off entire balance in 2 years instead of 5+.
Credit score dipped slightly at first (due to inquiries + account closures), but improved steadily after payoff.
Freed up cash flow to start saving again.
👉 This wasn’t a magic fix, but it was the right tool at the right time. Structure + discipline = success.
Key Takeaways
Consolidation can cut interest and simplify payments.
Closing cards helps avoid temptation, but keep at least one open for history.
Automation reduces stress and errors.
Credit score may dip short-term, but long-term progress matters more.
The real key: stop new debt during consolidation.
