Carrying multiple revolving credit card balances at 24% to 29% APR severely erodes household disposable income. Consolidating debts into a single lower-rate installment loan accelerates debt payoff.
1. Consolidation Economics Case Study
| Strategy | Total Debt Balance | Blended APR | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| Multiple Revolving Cards | $15,000 | 26.5% | $485 / mo | $11,420 (over 5 yrs) |
| Consolidated Installment Loan | $15,000 | 11.9% | $333 / mo | $3,980 (over 4 yrs) |
| Net Household Savings | — | -14.6% APR | +$152 / mo Cash Flow | $7,440 Saved |