How to Know When It’s Time to Consolidate Your Debt 

How to Know When It’s Time to Consolidate Your Debt 

Does debt consolidation make good sense for you? Before you decide, consider some situations and times when consolidating debt could be the right move:

You Have Too Many Loan Payments

If you simply have too many loan payments to manage and make each month, debt consolidation can make your life lots easier. Plus, it is convenient to pay so there is less chance of being late.  

You Lack Liquidity

Another time when it makes sense to consolidate your debts is if you have limited to no cash flow. A business needs some liquidity, and debt consolidation can free up funds for other things.

You Are Busy

Managing a business is time-consuming. You are busy with a lot of different responsibilities to tend to. Debt consolidation simply makes paying your debts easier and more streamlined. This frees up time for other things.

There Are No Prepayment Penalties

Do your current debts and loans have prepayment penalties? If they do not, then debt consolidation could be a great option. Some debts have fines or charges for paying the loan early- if this is the case, you do not want the hefty fees so consolidation may not be the answer right now.

You Have Credit Debt

How much of your revenues go toward paying down credit debt? Lenders may shy away from you with too much credit debt. As a rule of thumb, you should not incur more than 30% of your company’s capital in credit debt.

Your Sales Have Increased

How are your sales this year? If your business has increased and you are seeing higher profits than last year, you likely will be a good candidate for a debt consolidation loan. Naturally, this is contingent on other factors as well, including credit history, rating, and other criteria.  

There are a lot of times when debt consolidation makes a lot of sense. Consider these scenarios and talk to the money professionals at Champagne Global Capital to learn more!

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