Many people think bill consolidation is synonymous with financial defeat – happening when you aren’t able to pony up the cash for your monthly credit card statement. But the truth is, bill consolidation can be the catalyst that propels you to really tackle that growing pile of debt. Bill consolidation has been a huge boon to my financial wellbeing, and it can do the same for you. Keep on reading for six reasons why debt consolidation can make a huge difference in your finances.

1. Easier Maintenance of Payments

Trying to keep up with a myriad of bills can be a daunting – even overwhelming – task. You’ve got various due dates that may or may not correspond to your pay schedule. Take all those bills and consolidate, and you have a single bill with a single due date to remember each month. If you’re an auto pay fan, it reduces the hassle of overseeing multiple debits to ensure that you’re not overcharged. Managing one payment: easy. Managing eight: not so much.

2. Lower Interest Rates (more money towards principle)

Ever tried to haggle a better interest rate from a credit card or student loan lender? Not an easy feat. Consolidation companies, however, have a little more pull when it comes to negotiating better interest and fees. Creditors understand that when a consolidation company is involved, it’s a sign that their client is serious about paying off their debt. This gives them a bit of leverage to work out cheaper interest rates from you since they know for certain that they’ll be getting a payment in each month. In return, this lower interest means that more money is going towards paying off the principle (the original debt) which will knock down the debt more quickly.

3. Cheaper Monthly Payments

Since a good chunk of the total bill is cut down once you lower the interest rates, minimum payments go a longer way. For example, I consolidated three years ago and started out with around 15K in debt. My monthly payments were around $500, but Consolidated Credit was able to get one of my credit cards down from a 21% interest rate to an 11% interest rate (as long as I agreed to freeze the account). Multiply these savings by three or four creditors, and you have a significant monthly savings. Once I consolidated, my monthly bill went down to $350.

4. Peace of Mind

Creditors’ phone calls are no fun. If you’re ever been more than 120 days past due on a bill, you know that creditor phone calls can become a daily occurrence. There is nothing like the stress of someone calling multiple times a day asking you for money that you don’t have. Especially if it’s gone to collections and they demand the payment in full. In a relatively short amount of time, consolidating companies can make those call go away.

5. Improved Credit Rating

No one knows exactly what the algorithm is that’s used to determine your credit score, but one thing we do know is that paying off debt increases your debt to credit ratio. Your debt to credit ratio is the amount of money you owe in comparison to the amount of credit you have. Decreasing your debts puts a bigger gap in between what you owe and what the amount of credit you’ve been approved. This makes you more stable looking to credit companies, and in turn, increases your credit score.

6. Support Network

Surprisingly enough, a debt consolidation company can provide a network of support for debt repayment. I found that when I called the consolidation company each month to update them on the status of each bill, they were always really encouraging and mailed out budget advice and tips on a monthly newsletter. A network is crucial to staying on track. There are lots of distractions to keep you from your debt repayment goal, but others in your situation and people who’ve successfully gotten out of debt can provide the right advice at the right time.

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