Depending on your situation, there are a variety of ways to consolidate your credit card bills and other loans. Some of the ways including using the equity in your house, calling a third party organization to help you with payments, and taking out a personal loan to pay off your entire credit card balance.
- Using a home equity loan – The major benefit to taking out a home equity loan for consolidation is that you’ll save money with lower rates. You might be able to deduct the interest you pay on the loan as well.
- Using a debt consolidation firm – Debt firms work by allowing them to negotiate with your credit card companies, and then paying them directly. This is an easy way to consolidate your debt because you won’t have to worry about making monthly payments to multiple creditors. Before you hire a consolidation company, use a loan calculator to compare the fees being charged by the firm against the interest rate you could get with a personal loan.
- Using a personal loan – A personal loan is a great way to pay off credit card debt because you’ll be able to save money with interest rates. Credit card interest rates are always high, unless you pay the balance off in full. This option also allows you to make one low monthly payment instead of multiple payments to different companies.
Generally speaking, if you have serious trouble with credit card debt, consolidation is a great option. If you have less than perfect credit and you don’t own a home, you can still use a consolidation firm to help you pay off the debt or ask a friend or family member for a personal loan. If paying back a friend or family member requires you to include interest, use a loan calculator first to determine if the option still suits you.