Credit consolidation is an effective method for debt management and to save money. The number of available options for consolidating your credit can make it difficult to decide which method is best for you. There are a few factors in making the decision of one over the other.
Here are a few options for consolidation:
1. Personal Loans
Acquiring a personal loan for your financial institution or online lenders is one approach for acquiring a personal loan to consolidate credit accounts. Eligibility for these loans will be based on your current credit status. The benefit is greater if you are in good credit standing, which could also afford you a lower interest rate on the new loan.
2. Retirement Account Withdrawal
If you have a retirement account that permits withdrawal, it could help in debt repayment also. This is typically a good idea when credit card debt becomes overwhelming and the risk of falling behind or defaulting is near. You won’t have to endure a credit check and with a qualifying 401(k), penalties for early withdrawal could be avoided also.
3. Home Equity
It may be possible to borrow against the equity accumulated in your home for credit consolidation purposes. Many times, the interest rate on homes are much lower than that of credit card accounts. Another benefit is that certain amounts of the interest can be written off on your taxes.
4. Zero Percent Interest Balance Transfer
You may have noticed offers to transfer balances from your other cards to a single card. This is an option to consider, especially when the promotion offers 0% interest for a certain period of the repayment time. Credit consolidation with balance transfers is a major plus when you can repay the amount transferred within the interest-free period.
If you would like to learn more about how credit consolidation could help you,
contact Credit Counseling Tampa Bay, Inc. today.