How to Consolidate your Debts to pay less

Loans

There are several debt consolidation methods

You have options when it comes to debt consolidation. There are certain financial tools that you can utilize.

  • Debt consolidation low interest

This personal loan is capable of managing your debt with a few easy steps

  1. A lump sum loan issued by the lender
  2. Pay off debt with money
  3. Repay your consolidation loan to the lender

Pros:

You will be able to conveniently repay loan with a single monthly payment. This eliminates keeping track of multiple statement and track of your bill.

You will be able to save significant amounts if you get a loan that provides lower interest rates than the debt you are trying to consolidate

Cons:

Consolidation is a loan which means it is a debt. You will still need to be responsible about paying off this loan.

Balance transfer cards

The card for balance transfer is the better option than to consolidate your credit cards.

This will allow you to transfer the balance of credit card to a new card. They usually offer 0% APR and an introductory offer.

Pros:

Offers relief from APR

Some cards allow you to make a maximum of five card transfer to a single account

Cons:

Any balance at the end of the period of introductory that you have will be charged APR

Equity home loans or credit line

A loan of this type should be utilized like a consolidation loan for the purpose.

Pros:

With this loan and good credit, you might be able to get better interest rates

You can borrow more with bigger equity build up

Cons:

This type of loan requires collateral, namely your house. Your house will be at risk if you default on the loan

The perfect way to escape debt

It depends on how serious your debt is. If your debt is too serious then maybe a consolidation loan is not for you and you need to find another solution to get you debt free.

Depending on your situation, debt can be the one thing you will lose.

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