3 ways to consolidate your debt

Debt can be a real monster, and debt consolidation is a hopeful option for a lot of people. The idea of putting all of your debt in one place, with one monthly payment can be a real relief. But what are your best options for consolidating your debt? Here are a few to consider…

A balance transfer credit card: If you’re looking at this option, you’ll want to first make sure that you find a card that will have a high enough limit to contain all of the debt you want to put together. You may be able to find one with a zero percent introductory rate, which is ideal for paying off debt. If you have $3,600 of debt, and an introductory rate of zero percent for 18 months, you can pay 200 bucks a month for 18 months, and be completely debt free without paying a cent of interest. If this option interests you, here are some pros and cons to consider.

A home equity loan: After the introductory rate on a balance transfer card, the interest rate can be high. The main benefit of a home equity loan, is that the interest rate will be a whole lot lower. Just be careful if you go this route: If you default on the loan, you’re putting your home at risk. If this option sounds better to you, here are some things to think about before you take the plunge.

A personal loan: If you don’t like the idea of risking your home (or any other form of collateral), then a personal loan might be the best option for you. If you’ve got a good credit score, you can probably qualify for the loan, and if you’ve got a great credit score, you’ll probably get an even better interest rate. Plus, you can get the loan through your credit union, so you’ll have a lender that has your back. If this sounds like a good option for you, ask your credit union about any debt consolidation loans they have available.

John Pettit

John Pettit

John Pettit is the Managing Editor for CUInsight.com. Through news, community, press, jobs and events, he keeps credit unions digitally informed throughout the day. Web: www.cuinsight.com Details