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  • When your monthly debt starts to escalate, it can begin to seem out of control. You may read about debt consolidation companies that claim to be able to help you cut your debt in half, or some other similar claim. Consolidating debt is a good way to lower your monthly payments, lower your interest obligation and get your debt under control. But there are ways of doing debt consolidation that you can explore on your own without worrying if what you are doing is the right thing.

    Zero-Interest Credit Cards

    There is good advice for and against zero interest rate transfers as a way of consolidating debt. The best way to get the most from this program is to be smart and do your research before you get involved. What happens is you will find a deal either in the mail or in some other way that advertises transferring your balances from other cards to a single card and the transferred balances will be put in at zero percent. The key is to read the fine print and see how long the zero percent deal lasts, and what the interest rate goes up to after the introductory period is over. You may find that even the raised rate is lower than your current rates, and that would make this consolidation a good move.

    Personal Loans

    Using a personal loan is one of the better ways to consolidate your credit card debt because it does not involve opening up another credit card account. You are using a low-rate personal loan to bring together the balances of all of your high-interest credit card. While you are not normally rewarded for simply moving money around on your credit score, your monthly interest and service fee payments will be considerably less than they were before and you can start to work on paying off your debt.

    Home Loans

    Sometimes refinancing a home, or using a home equity loan, is a good way to consolidate your credit card debt. If you get a fixed interest rate on your refinance or equity loan, you know what your payments will be every month for the duration of the loan. The only consideration is whether you want to tie credit card debt in with a 30-year mortgage. This is why many people prefer a shorter-term home equity loan to consolidate credit.

    Source:

    TheSmarterWallet.com: How to Consolidate Debt

    DebtSmart.com: 8 Ways to Consolidate Debt

    Bankrate.com: Consolidate Your Debt

    Resource:

    MSN Money: Consolidate Your Debt Payment

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