How Can You Consolidate Debt?
Debt consolidation is when you combine different debt accounts like credit cards, medical bills, and student loans under one big payment. You have a few ways to consolidate debt, including getting a large personal loan or borrowing against existing collateral like a house.
Apply for a Personal Loan
Check into financial services like Symple Lending that provide personal loans you can use to pay off other smaller loans, credit cards, and lines of credit. Then, you only have to make payments towards that one personal or consolidation loan, saving you time, lowering interest rates, and leaving multiple payment dates behind. Just remember, that a personal loan can come in one of two options — unsecured and secured.
When you get a secured personal loan, you must put up collateral such as a home, car, or other valuables. A smallerexample is a pawn shop that allows you to take out a loan in exchange for valuables you bring to the pawnbroker. An unsecured loan does not require such collateral. It mostly relies on your existing credit rating, such as your credit score. The higher your credit score is, the better interest rates you can get on an unsecured loan.
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Take Out an Equity Loan
Are you a homeowner? If you have a home you have already made years of mortgage payments for, you likely have significant equity. Equity is the amount on the home you already paid off. You can take out a loan against that equity and use it for anything you like, whether it’s renovating the house, opening a business, or consolidating other debt. You can think of it as taking out a loan against yourself.
Contact a Settlement Service
Did you know you may be able to have some of your debt forgiven? If you’re in dire financial straits, a debt settlement professional like Freedom Debt Relief can negotiate with creditors on your behalf. As long as the debt is unsecured, like medical bills, credit cards, department store cards, and unsecured personal loans, and you can prove financial hardship, you may qualify. How much is forgiven can vary. The settlement may include paying a lump sum or making monthly payments on the renegotiated amount.
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Roll Debt to a New Card
If credit cards are your main debt, you may consider rolling several card balances into one with a bigger limit and interest rate. Start by contacting each credit card company and requesting a balance transfer. Once those transfers to your new card are complete, close those other accounts.
As you can see, there are several methods to combine existing debt. Doing so makes it easier to pay down and at better rates. Look into your debt consolidation and settlement options today.
