Debt Consolidation - Home Equity Loans and Balance Transfers
Debt consolidation is a strategy that can help consumers address skyrocketing debts. If you are struggling to manage your debt there are a variety of loans that can make life easier with variable degrees of risk. Consumers are always well-advised to obtain the lowest interest rate possible on such deals. Here are two such options that will help you to pay outstanding debts in one low monthly payment.
You could consider a home equity loan for . If you are deeply in debt, putting your home forward as security is one way to secure much needed funds. Obtaining a consolidation loan will allow you a lower rate of interest. Home equity loans also mean you can pay less than the total of all your s combined.
However, consumers considering a home equity loan for should be aware that if you can't pay your bills you stand to lose your home. It is a good idea to close all your credit cards (except one for REAL emergencies) as you repay them.
Doing balance transfers is another debt consolidation strategy that can be used to take control of your debt. In this case you apply for a low interest credit card and transfer all your credit card balances onto this single card. Remember that low, 'initial rates' are for a limited time only. This means that you will need to transfer your bills to a second low rate card before the rates revert to normal to take keep getting the benefits of balance transfers.
Bear in mind that there will be additional fees with this type of debt consolidation strategy - for example transaction fees. Make sure to read your contract thoroughly to find out exactly how much it is actually going to cost you to make such transfers. Any payments must be made on time. Making late payments will raise your interest rate to the standard rate, making your savings null and void.
If you choose either of these options there is one more step you need to take. Close your credit card accounts. Yes, I said close them! You will never if you keep spending, never! It's just not possible. Make the commitment to pay cash for what you need. If you don't have the money, you can't afford it, so leave it alone. Save up for the things you need instead. Remember why you needed debt consolidation in the first place!
