Debt can sometimes have a snowball effect, growing and growing until it is too large to see past. This feeling of debt weighing you down could feel normal. For years, researchers have studied how being in debt could negatively impact an individual’s mental health when compared to debt-free individuals. Thankfully, Yolo Federal is here by your side as a guide to helping you get started on your journey to a healthy, debt-free future.

Where Do I Start? 

We recommend starting fresh with a whole new loan. That is right, we said it. It might seem strange, but consolidating your debt to a single, low-rate loan could help get you on the right track. With a single monthly payment, you can focus on your goal because you are less likely to miss a payment—saving money on late fees—and you could pay less interest over time.

Closed-End Loan vs. Line of Credit: What’s the difference?

A Line of Credit, such as a Credit Card, can be more flexible and could have a variable rate. You can use a Line of Credit to make purchases when you need cash in a pinch or even consolidate debt. Each institution may accrue interest differently, but typically you accrue interest if the entire balance is not paid-in-full.

Using a Credit Card to consolidate debt could make it tempting to add to your debt rather than eliminate it by making purchases. There are a few steps you could take to prevent this:

1. Turn your card off using your Mobile App
2. Hide your cards
3. Destroy your cards

If you want to avoid any temptation, then consolidating your debt to a Closed-End Loan could be a better fit and help keep you on track. A Closed-End Loan, such as a Personal Loan, typically has a fixed rate and an end date that you can work toward to achieve your goal. You will use a lump sum to pay off your debt, and when you’ve made your last payment, the loan closes, and you are done! Both options have their benefits, and it comes down to choosing what best fits your goals and needs.

How can Yolo Federal help?

Our Closed-End Signature Loan is a stress-free option for consolidating debt. With payment periods of up to 93 months, and a fixed, low rate, you will be able to see the light at the end of the tunnel. Click here to learn more about Signature Loans.

If you’re looking for more flexibility, our Visa® Gold Credit Card might be the right choice for you. Our low rate Credit Card and zero balance transfer fees have helped many members eliminate their debt. Click here to learn more about the Visa® Gold Credit Card.

If you’re interested in learning more about how you can become debt-free, check out our Debt Consolidation Learning Modules on the Achieve Financial Success platform. These modules will help you manage debt, create a budget, and develop healthy financial habits. Click here to get started.

At Yolo Federal, our mission is to help Yolo County achieve financial success, and our team is eager to help you do just that. Our representatives are available to meet with you by appointment or over the phone at (530) 668-2700.