5 Ways To Get Debt Consolidation

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There are five ways to get debt consolidation 

1. Numerous sources offer personal loan options 

Most often a bank, credit union, or online lender their interest rates vary, but usually are fixed at rates less than what’s paid on credit cards. However, most personal loans include an origination fee, some include a pre-payment penalty, and others require collateral of home or car. Qualifying for a personal loan with a low credit score can be difficult, especially if your debt-to-income ratio is high. Look into online and peer-to-peer lending websites.  

2. Home equity lines of credit  

These carry relatively low interest rates, but your home serves as collateral and could be lost if you fail to make payments. Application fees and closing costs also could be involved. 

3. Debt Consolidation Loan   

These are used solely to combine all your debts. These loans may be offered by major banks or from so-called non-profit debt consolidation companies. Be careful about using debt consolidation companies to consolidate debt.  

These loans often include extra fees, making the cost of the loan much higher. Avoid borrowing money from one of these companies. Instead, seek out a low interest rate loan from your bank or credit union for better terms and to ensure you’re not being scammed. 

4. Credit Card Balance Transfer   

You can use a low rate balance transfer to move your balances onto a single credit card. That’s if your credit card has a large enough credit limit. A low credit limit doesn’t have to stop you from doing a balance transfer. You can transfer just one or two of your highest interest rate credit card balances to ease some of the debt pain. Before you consolidate debt with a balance transfer, make sure you’ll actually be saving money with the transfer. It’s not worth it to consolidate debt and end up paying more. 

5. A debt management programme  

It’s a popular choice because it typically includes credit counseling and education programmes to help you to identify the causes of your financial problems. Credit counselors also can provide solutions that you can take with you after completing the programme. The downside is that they usually take three to five years to eliminate the debt and some people aren’t patient enough to stick with the programme that long.

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