Credit cards offer a convenient way for consumers to purchase the goods and services they need without having to carry cash. Unfortunately, when not used responsibly, those cards also make it easy to wind up in a lot of debt. Readers who have found themselves in this position should know they are not alone and there are programs out there that have been specifically designed to help people get their finances back in order after irresponsible credit card use.
What is Debt Consolidation?
Consolidating debts allows consumers to simplify their monthly payments and often reduce the amount of interest they need to pay. This can be accomplished either by taking out a debt consolidation loan or working directly with the credit card company to make new repayment arrangements. Choosing the right debt consolidation option requires consumers to do a little bit of research, so read on to find out about a few of the most popular options.
Debt Consolidation Companies
There are plenty of companies out there whose only purpose is to negotiate with creditors on their clients’ behalfs to lower interest rates and settle accounts. Readers who choose to take this path can expect to be put on a debt management plan based on their income and expenses. They should also expect their choice to work with a debt consolidation company to be reflected on their credit reports.
Debt Consolidation Loans
Some major financial institutions offer debt consolidation loans in addition to other forms of personal loans. These can be either secured using collateral or unsecured. The ability to qualify for an unsecured loan depends largely on users’ credit scores, incomes, and their ability to prove they will be able to make payments on time.
Home Equity Loans
Those who have fallen far behind on their payments and have substantial debt may still be able to qualify for home equity loans. It’s important that they are aware of all the potential fees and expenses this form of debt consolidation can incur, especially since defaulting on these loans can wind up leading debtors to lose their homes. Readers who are interested in learning more about these and other options can find out what they need to do to begin consolidating debts and getting their finances back in order today.