There are several options to consider if you want to consolidate your credit card debt, or any other debts you have. The most common options include transferring the balance to a credit card with a lower interest rate, taking out an unsecured personal loan, a 401(k) loan or a home equity loan.
The option that is going to best suit your needs will be dependent on how much debt you have, your credit history and score, how much cash you have access to and other factors related to your financial situation. The process of consolidation is going to work best when your goal is to get debt free.
Transfer Your Debt To A Lower Interest Credit Card
You can find a credit card with a higher limit and lower interest rate. This will allow you to transfer your balances to it, and pay less in the long run. In most cases, you will have to have a very good to excellent credit rating to qualify for this option (a score over 690 is preferred).
In order to ensure that you make the most of this transfer, you should make a budget to pay off all of your debt before the interest rate increases. In most cases, new credit cards will provide you with a zero percent interest rate for a certain amount of time. The goal will be to pay off this amount before the promotion ends.
Utilize a Personal Loan
You can also opt to take out a personal loan from your own credit union or your local bank. There are also online lenders who offer debt consolidation loans that will help you pay off your high interest debt. These loans will provide you with a much lower interest rate, which means that you will be able to pay the balance faster.
It is a good idea to talk with your bank or credit union first. In most cases, this is going to be where you can receive the best terms for the loan. This is especially true if your credit rating needs work.
If you go online for your consolidation loan, you will be able to apply for this without any affect to your credit rating. The majority will provide you without the need for a “hard inquiry,” which is beneficial since most banks and credit unions will do a hard inquiry.
Keep in mind, the better your credit rating is, the better interest rate that you are going to get. Lenders will not charge you any fees if you pay off the loan early; however, they may charge you some type of upfront fee that ranges from one to five percent. Make sure you understand the terms before taking out the loan.
Ad you can see, there are many ways that you can consolidate your high interest credit card debt. Make sure you consider all the options to find the one that best suits your needs. When you do this, it will help you get out of debt for good and enjoy financial freedom. More information about these services can be found by visiting the Consolidated Credit website. This is beneficial for anyone who wants to get out of debt.