Consolidating your unsecured lines of credit debts can make it much easier to pay off your debt. You shouldn’t ever feel like you have to declare bankruptcy to get out from under your crushing debt load. There are many methods of consolidation that you can use to organize your finances in an orderly way. What would be the best option for you?
Traditional Methods Of Credit Consolidation
People who have a low credit score may not qualify for traditional consolidation methods such as a home equity loan. However, it is still worth going over because you can never say never when it comes to getting a loan.
Your best bet is to look into a balance transfer to consolidate your debts. What you do is place all of your credit balances onto a credit card with a lower interest rate. You then pay off that card instead of the multiple cards you are currently paying off. Look for a card that has a good introductory rate. This can give you some time to pay at a lower interest rate even if the rate jumps after the introductory period expires.
Home equity loans are another easy way to consolidate your debt. The process involves getting the bank to give you access to the equity in your home. You then use the equity to pay off your current bills. All that is left to pay back is the home equity loan. Interest rates on equity loans are usually not much higher than your first mortgage.
Debt Management Plans Offer Better Financial Organization
Some people don’t need a lower interest rate on their debt. Sometimes all it takes is a little organization. Going on a debt management plan will help you organize your payments in a manner that allows for a timely payment each month. The focus is more on budgeting as opposed to settling your debt.
However, you still will make just one payment to the credit counseling service each month. That money is then sent out to your creditors. This is a great option for anyone who wants to pay off their debt with as little help as possible.
Taking advantage of the opportunity to learn better money management habits is a good idea if you are a college student. Students tend to be targeted because of their inexperience dealing with credit. This inexperience leads to more debt leading to more money for credit card companies.
Debt Relief Services For Those Who Need More Help
You can still use debt relief services to give you more substantial relief. Consolidating your unsecured personal line of credit is a great idea because you can pay your debt down over time. Your creditors will typically give you at least two years to pay back the money you owe. Lowering your interest rate will help you out as well.
Consolidating your debt is a better idea for those who have less than $10,000 in debt. Debtors who have a good credit score should also consider a consolidation. Consolidating is preferable to a settlement because it will not impact your credit record as much. Creditors also tend to get more money from debtors who consolidate as opposed to asking for a settlement. This makes them more likely to work with you.
Debt consolidation is also a better option if you have secured debts that you would like to settle along with your unsecured debts. Having the ability to merge your car loan with your credit card debt can be more convenient for you when trying to pay down all of your debts.
Consolidating your unsecured line of credit debt is relatively easy to do no matter what your credit situation is. Common consolidation methods such as balance transfers and equity loans should always be looked into. You never know when a lender will be willing to take a chance on you. However, debt relief services can be a vital tool in your fight to pay off your unsecured debt once and for all. Call us today to talk to a credit consolidation specialist.