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Other Ways To Consolidate Debt
There are other ways to consolidate debt besides applying for a debt consolidation loan:
Credit Card Transfer
You can consider transferring your balances of other cards to a low interest credit card. You can do this by calling your credit card issuers to ask for the rate they offer if you transfer the balances from other cards over to theirs. Try to negotiate for a fixed rate and ask them to waive any transfer fees when possible. Alternatively, you can use a site like CardRatings.com to shop for a new low-rate card for the purpose of consolidation. With this method, you don't risk your asset since credit card companies don't require collateral. Avoid too many applications for credit in short period of time because it can affect your rating negatively.
Retirement Loans
You can borrow against the money (up to 50% usually) in your 401(K), 403(b) or pension plan to consolidate debts. It is easy because the loans can be obtained with no income qualifications and credit check. These loans typically offer low interest rate, since you are the lender. However you may have to pay back debt if you lose your job before loan repaid.
Debt Consolidation Services
There are 2 types of consolidation services. If possible choose a non-profit debt consolidation service because if a service isn't non-profit, they will usually charge a monthly fee. Debt consolidation service typically offer counseling services and will negotiate on your behalf for a new repayment plan (usually with lower interest rate and fees) and after that you'll make a monthly payment to the debt consolidation company / agency, which will pay all you creditors. But be careful which agency you work with, if the debt consolidation agency make late payment, you'll pay the price as you're still responsible to the lenders.
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