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Start the New Year Off Right: Debt Consolidation


Start the New Year Off Right: Debt Consolidation

You have no doubt heard that experts are predicting a recession in 2023. This news has been just about everywhere! One of the best things you can do to prepare for a possible recession is to start paying off debt, especially high-interest debt typical of credit cards. But paying off high-interest debt can be challenging. What can help you manage your debt and be in the best position to weather a recession? Debt consolidation may be a practical solution.

Even if you are not overly concerned about a recession, the new year is the ideal time to take a look at debt consolidation — especially if you've gone on a holiday spending spree! Here's what you need to know about the advantages of debt consolidation.

What is Debt Consolidation?

Debt consolidation takes multiple credit cards or loans and consolidates them all into one loan. The proceeds of the loan will pay off your other debts so that you only have one regular monthly payment, which is much easier to manage.

Here's how it works. Imagine you have three credit cards:

  • Credit card A has a $2,000 balance and a 19% APR.
  • Credit card B has a $1,500 balance and a 24% APR.
  • Credit card C has a $3,500 balance and a 21% APR.

Each month, you have to keep track of three different payments and due dates. But even more significantly, all of these cards have high-interest rates. If you make minimum monthly payments, you will be paying toward these balances for a very long time. Why? Because most of those payments will go toward the interest, not the principal... and the balance remains mostly unchanged.

A consolidation loan will wrap all the credit card balances into one loan with one monthly payment, usually at a much lower interest rate. Consolidation loans aren't just for credit card debt. You may be able to consolidate debt from:

  • Medical expenses
  • Unsecured personal loans
  • Credit lines opened when first starting to build credit
  • Payday loans and other lending products with high-interest rates


Consolidation loans can be a great financial tool to help you simplify your finances and save money.

Floridacentral can work with you to consolidate your high-interest debt using a low-rate Personal Loan, a Home Equity Loan, or a Home Equity Line of Credit. To learn more about whether debt consolidation is right for you, stop by any branch location or give us a call at 813-879-3333.


APR is Annual Percentage Rate. Each individual’s financial situation is unique and readers are encouraged to contact Floridacentral when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.