Debt consolidation solutions

Debt consolidation solutions

Debt brings to anyone a feeling of burden and uncertainty. Even though this type of situation can become very stressful, you can do your part so it doesn’t become worse. Debt consolidation offers many viable solutions to help you improve your financial status. It may seem like a difficult task, but if you are proactive you will succeed in getting your finances in order.

Debt-consolidation solutions

For those who own a house and already have some built equity there are a couple of options that offer help with relatively low cost:

Take out a home equity loan. This has the advantage of a fairly low interest rate, and the interest you are paying is tax-deductible. Most fixed-rate loans stretch over a 15-years period and require that borrowers pay an origination fee. This can range from $75 to several hundred dollars, plus the cost of an appraisal and title insurance.

Do a “cash-out” refinancing. Another option for those with home equity is refinancing your property for greater than the amount you owe and using the extra cash to pay off debt. You get very low interest rates this way, but you’re stretching payments out over 15 or 30 years. The total interest cost over three decades can wind up being pretty huge, so think of this as a one-time-only (if ever) option.

Car refinancing : even though many people don’t consider it it, it is a secured loan and you can borrow against it. Just be sure not to be left without a car before you remain without a debt.

Consider a personal loan. Those with relatively undamaged credit may qualify for an unsecured loan. Credit unions typically offer lower rates than banks, but still you can expect a rate of 11% or more. However, that is a lot better than the 20%-plus you’re now paying to the credit-card company.

Negotiate better terms. You can do this for yourself instead of paying other companies who will get a commission, usually 10% of your monthly payment,to do the same job.. Just call your credit-card company and ask them to do it (many customer service people are authorized to reduce rates right there on the phone).

Other alternative : learn to ask help. Address an organization like National Foundation for Credit Counseling. They have branches all over the country; they are a non-profit, community organization that provides free and confidential debt management advice to anyone who needs it. They are also reachable by phone.

NFCC gets paid by creditors, like other debt consolidators. This means it’s in their best interest to work out a repayment plan rather than advise you to declare bankruptcy.
NFCC gives you the prospect of a saner financial life, and the possibility to qualify for their low-rate mortgage program.

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