DEBT CONSOLIDATION
DEBT
CONSOLIDATION –
Involves
getting another loan, but a loan with lower interest rates that
your credit cards.
Low interest
debt consolidation loans can help you pay off your debt
sooner.
LOWEST RATES –
HOME EQUITY LOANS.
NEXT
CHOICE = PERSONAL LOANS –still
have lower interest rates than your credit cards, and will help
reduce your interest payments.
ANOTHER
ALTERNATIVE – CREDIT CARD TRANSFERS
-
transfer your credit balance to a new credit card account
that offers 0% interest on transfers.
HOME EQUITY
LOANS
Home equity
loans offer low interest rates because they are secured with your
property, reducing the chances of you defaulting. You can opt to
cash out your equity by refinancing or applying for a second
mortgage or line of credit.
Refinancing
can cost thousands in upfront fees, buy they can offer you overall
lower payments. Second mortgages and lines of credit usually cost
zero to a couple of hundred of dollars to open, but their rates are
higher than a traditional mortgage.
PERSONAL
LOANS
Personal
loans offered through banks and other financial lenders can also
help you consolidate debt. These types of loans are based on your
credit score and cash assets. Since these are unsecured loans,
rates are higher. However, when compared credit card rates, they
are significantly lower.
CREDIT CARD
TRANSFERS
You can also
open a credit card to take advantage of 0% or low interest rates on
transfer balances. These types of offers are introductory, so
expect rates to jump in six to twelve months. In the meantime, you
can start paying down debt while rates are low. At the end of the
introductory period, you can open another account or look for a
long term loan with low rates.
While
transfers are attractive, they do carry risks. You should read the
terms to be aware of any fees charged for transfers. Also, guard
against racking up more debt by closing old accounts. This will
also help your credit score in the long term.
SHOP FOR THE BEST RATES
No matter what type of loan you choose to use to
consolidate your debt, be sure to research rates. By comparing
offers, you can save thousands in interest
charges.
CAVEAT!!!!
READ
THE TERMS AND CHECK THE FEES!!.
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