U.S. military veteran struggles with credit card bills

Veteran Debt Consolidation: Real Solutions (and What to Avoid)

ByBeyond Finance Team

As a veteran, you know the meaning of service. But as so many former U.S. military personnel know, it can be difficult to find the right support when you need it — especially if you’re struggling to find a way out of major credit card debt.  

That’s why you need a partner who gets how debt works. And at Beyond Finance, we know how to help you navigate this system — our team helps service members start new paths out of debt every day.  

In this article, we’ll review:

  1. Why veterans get stuck in the cycle of debt in the first place;
  2. Common debt payoff pitfalls, and what to avoid;
  3. How a strategy like veteran debt consolidation can offer a clear path forward.

Why Debt Can Feel Like a Trap

Unsecured debts aren’t tied to an asset, like a house or a car. Credit card or personal loan balances can quickly grow, often with high interest rates. 

Paying the minimum can feel like you’re just treading water, while keeping up with mounting interest is like the strain of swimming against the current. But like many problems, the first step is understanding.

Seeing the Cycle of Debt

Each of these factors feeds into the other, creating a systemic issue that can be difficult to overcome by yourself. 

  • High Interest Rates: All credit cards have interest built into the business model. Currently, the average interest rate in the United States is around 24% — a hefty fee that makes it difficult to get out from under a balance that you’re already working hard to pay down.
  • Minimum Payments: While helpful in the short term, minimum payments barely scratch the surface of large debts. Only paying the minimum due puts you at risk of only paying interest, not your actual balance. That means minimums can keep you in debt longer, and virtually ensure you’ll pay more over time. 
  • Multiple Debts: Juggling several different debts with unique due dates and interest rates can be confusing. Multiple high-interest debts can also be risky to your overall financial health, as high credit utilization can compromise your ability to qualify for loans and stunt your credit score. 

It’s not fun to find yourself in this vicious cycle, but breaking free is possible.

Picking a Trusted Partner: the Difference Between Legit Debt Help and Scams

The financial landscape is riddled with predatory scams masquerading as legitimate help for veterans in debt. But how can you tell which companies are trustworthy?

What Trustworthy Veteran Debt Consolidation Looks Like:

  • Accredited and Vetted: Companies with your best interests in mind seek out customer reviews, third-party accreditation from the Association for Consumer Debt Relief (ACDR) and input from consumer review sites. 
  • Reasonable Claims: You can expect a debt consolidation company to help you save an average of 40% on monthly payments, reduce your overall interest paid and speed up the process to get you out of debt.
  • Transparency: Customer service provides clear, helpful answers to client questions and concerns. 
  • No Upfront Payments: A legitimate “debt consolidation” or “debt relief” company will never ask for payment in full at the beginning of a program — in fact, asking for any money upfront is illegal. Reliable companies include their fees in your monthly payments, meaning you only pay for their services as you succeed in reducing your debt. 

How to Sniff Out a Scam

Many veterans looking for solutions encounter programs that sound too good to be true. Like VA “claim sharks,” there is an ecosystem of scammers who prey on veterans in financial distress. Companies promising magic fixes can leave you in a worse spot.

Common Red Flags in the Debt Industry:

  • Companies with few customer reviews
  • No or outdated accreditation from the ACDR
  • Companies claiming a direct connection to the VA or other official government agency
  • A rating lower than A+ from the Better Business Bureau
  • Promises of debt forgiveness, credit repair or any other too-good-to-be-true benefits

True financial health comes from solid planning and sometimes, professional guidance. These risky “solutions” can put your personal information and long-term financial health at risk. Always prioritize legitimate and trusted options.

How Debt Consolidation Can Help Those Who Served

Debt consolidation helps veterans in two core ways: 

  1. Reducing the amount of debt they’ll repay overall
  2. Combining separate debts into one, manageable monthly payment

The goal of debt consolidation is to provide immediate relief from the burden of high monthly payments while getting people out of debt faster. 

When you enroll in a debt consolidation program, your payment goes towards reducing your principal balance instead of paying interest, effectively disrupting the cycle of debt. 

Benefits of Debt Consolidation:

  • Simplified Payments: One payment instead of many makes budgeting easier.
  • Stop Mounting Interest: Cutting off the cycle of interest means you save money over time.
  • Clear Path to Freedom: With lower monthly payments and payoff timeline, you can see your debt diminishing.
  • Reduced Stress: Knowing you have a plan can greatly reduce financial anxiety.

For many veterans, this streamlined approach is a game-changer. It provides a structured way to pay down debt without the constant juggling act.

A Partner in Your Mission: Professional Guidance

If the thought of tackling these steps feels overwhelming, remember you don’t have to do it alone. Sometimes a professional partner can provide the map and the tools you need. Companies like Beyond Finance specialize in creating personalized plans to help individuals achieve financial health.

We understand the unique challenges veterans face. Our goal is to provide empathetic support and practical solutions to help you regain control. We can help you explore if debt consolidation is the right fit for your unique situation. We prioritize supportive and non-judgmental customer assistance — and when you need to talk, we’re here to help.

Your Path to Financial Freedom Starts Now

You’ve shown incredible strength and resilience in your military service. It’s time to apply that same determination to your financial well-being. Taking the first step towards addressing your debt is a brave move. You deserve a future free from financial stress.

Don’t let unsecured debts hold you back from achieving the financial health you deserve: Learn how we can help you explore your options and create a tailored plan to achieve financial freedom.