And you will pay a monthly payment to them, which will go toward paying the principal of the loan as well as interest and fees.
If that’s the case, putting your house on the line may be too risky of an option for you.
Balance Transfer You might have seen offers for “0% interest” credit card balance transfers.
Home Equity Loan (or HELOC) A home equity loan, or Home Equity Line of Credit (HELOC), allows you to borrow money against the value of your home.
The size of these loans varies, but they can often be up to 75-80% of your home’s value.
That can make it easier to focus on getting out of debt. People have saved thousands by consolidating higher-interest debts using a single, personal loan, this will not negatively impact your credit.
Check Your Rate Now The term debt consolidation encompasses a wide range of options. Below, we’ll describe the various different ways you can consolidate your debt and explain the advantages and disadvantages of each particular option: Debt Consolidation Company There are many debt consolidation companies out there.In theory, these can serve as a way to consolidate your debt onto one card, but be careful because the fine print on these offers sometimes exposes serious drawbacks.Here’s how it’s supposed to work: you initiate the balance transfer and pay a immediate transfer fee – usually between 2% and 5% of your total balance.However, you must be cautious when dealing with debt consolidation companies.Once you have agreed to the debt consolidation plan, you can’t go back, so it’s important to understand the potential consequences first.The reason this can be helpful to people with a lot of debt is that it can solve three of the worst problems you face: 1) High interest rates Some types of debt (particularly credit cards) can have extremely high interest rates – up to 25% or more.