The average household in the U.S. has around $6,194 in credit card debts. While this might seem like nothing compared to the amount you owe, it is still a lot of debt to repay. If you have even more than this, you might want to find a way to consolidate your debts. Debt consolidation is a great way to pay them off faster and improve your financial state. Here are some options you can consider if you are interested in consolidating your debt.
Transfer Them to One Credit Card
Some people find ways to consolidate without involving a lender. The main way to do this is by transferring your debts to one credit card. If you have enough credit on one credit card, you could move all your balances to that card. Before doing this, make sure the card has a low interest rate. If it does not have a low rate, you might want to apply for a new credit card. When you get a new card, the company might offer a low introductory rate that applies for at least one year. Moving all your balances to this card could help you save money, especially if you can get a 0% interest rate.
Get a Personal Loan
The second way to consolidate your debts is by getting a personal loan. A personal loan is an unsecured loan that allows you to use the money any way you like. If you qualify for one, the bank gives you the cash from the loan, and you can use it to pay off every debt you have. The benefit is that you have only one debt payment to make each month, and it will likely be less than the total you currently pay for your debts.
Refinance Your Home Loan or Take a Second Mortgage
The other option you can consider is refinancing. If you own a home, you can either take a second loan on the house or refinance the existing loan. In either case, you can request a cash-out loan, which means the lender will let you take cash from it to use for paying off your debts.
These are three options that people commonly use for consolidating their debts. If you are interested in getting a loan to accomplish this goal, talk to a lender. A personal loan might be a good choice, or you might want to consider refinancing. A lender can help you learn more about your options.Share