Debt Consolidation vs. Refinancing: Which Is Right for You in 2025?
Debt Consolidation vs. Refinancing: Which Is Right for You in 2025? If you're juggling multiple debts in 2025, two strategies often come up: debt consolidation and refinancing . While they sound similar, they work in different ways and suit different financial goals. 🔁 What Is Debt Consolidation? Debt consolidation means combining several debts—like credit cards and personal loans—into a single loan with one monthly payment. This is often done via a personal loan or balance transfer credit card. ✅ Pros: Simplifies multiple payments into one Can reduce overall interest if you qualify for a lower rate Helps with budgeting and avoiding missed payments 💳 What Is Refinancing? Refinancing replaces an existing loan with a new one—usually with better terms. This is common with mortgages, car loans, or student loans. ✅ Pros: Lower interest rate or monthly payment Extend or shorten loan term Option to switch between fixed and variable rates 🧠 Which Sho...