Options to consolidate your credit card and other debts include a balance transfer credit card, an unsecured personal loan, a home equity loan or line of credit and a 401(k) loan.
The option that best suits you depends on your overall debt load, credit score and history, available cash and other aspects of your financial situation, as well as your self-discipline.
If you have enough cash left over after subtracting expenses from income, consolidation will be presented along with other options. How do you know if a debt management plan will work in your favor?
When a counselor is knowledgeable and compassionate, these sessions can be enlightening and motivating. If he or she acts bored, judgmental or pushy, request a different counselor. First, the bulk of your balances should be in unsecured debts, such as credit and charge cards, personal loans and, sometimes, collection accounts.
That's where debt consolidation and other financial options come in.
Consolidate Your Debt Now Debt consolidation is combining several unsecured debts — credit cards, medical bills, personal loans, payday loans, etc. Instead of having to write checks to 5–10 creditors every month, you consolidate bills into one payment, and write one check.
Debt consolidation is a strategy to roll multiple old debts into a single new one.
Ideally, that new debt has a lower interest rate than your existing debt, making payments more manageable or the payoff period shorter.
As a result, they continue adding to their debt load instead of reducing it.The ten points below can help you use a credit consolidation program successfully while avoiding common pitfalls that often catch people off guard.If you’re thinking of consolidating credit card debt and you need an expert opinion to make sure it’s the right choice for you, we can help.These are not quick fixes, but rather long-term financial strategies to help you get out of debt.When done correctly, debt consolidation can: There are several ways to consolidate debt, depending on how much you owe.