7 Ways to Consolidate Your Debt

Home
>
Debt Consolidation
>
7 Ways to Consolidate Your Debt

7 Ways to Consolidate Your Debt

If you are in debt, you have several options available to you in your quest to consolidate your balances and thereby reducing your monthly payments or paying off your loan faster. Let's look at 7 of the most popular and effective ways for you to consolidate your debt.

1. Life Insurance. Yes, many life insurance policies have a cash pay out [loan] provision. If you have held the policy for quite some time, the amount of equity built up in it can be quite large. What if you can't pay the insurer back? Good question! In many cases the amount you owe will be deducted from what your beneficiaries would receive upon your death.

2. Your Retirement Plan. If you have a 401(k) plan at work, you can usually borrow from the account and use these funds to pay off debt. Caution: if you do not pay back the loan within a certain specified time or you leave your job, you could be faced with penalties and tax charges from the Internal Revenue Service.

3. Credit Card Transfers. Chances are some of your outstanding loans are for double digit rates. Shop around and see if a credit card company will allow for you to transfer your outstanding balance over to them and at a significantly lower interest rate. Make sure that the cash transfer fees are low [better yet, see if you can have this fee waived] and that your interest rate remains fixed.

4. Home Equity Loans/Lines of Credit. If you own your own home, it is likely that you have built up equity in your home especially if you have lived there for several years and you live in an area of rapidly appreciating home values. If this is the case, lenders will be glad to offer to you a loan or line of credit based on your home's value. You can use the loan/line of credit to pay off debt; in many cases the interest rate for the loan/line of credit is tax deductible too, whereas for a credit card debt it is not.

5. Renegotiate Your Loan. Some lenders will be all too happy to lower your outstanding interest rate, especially if in doing so they get to keep you as a customer. Sure, your 19.8% rate may only drop to 14 or 15%, but that may be all you need to get a handle on your debt.

6. Your Savings Institution. Banks, savings and loan associations, and credit unions may be able to help you consolidate debt by offering to you one loan that will pay off all your debt and allow for you to have a low, fixed-rate payment instead. Shop around, the rates vary!

7. Go to Mama! Family loans are a popular way to get rid of debt. Still, if you can't pay them back, what effect will that "non-payment" have on your relationship with your family member? Sure, it may not effect your credit standing, but it certainly could have a negative effect on your family standing!

Naturally, you will want to explore each of these options and see which ones are the most feasible for you. Read the fine print and make sure you understand the terms of any debt consolidation loans. You want to reduce your debt, not create an avenue for further trouble.

Matt Keegan is The Article Writer who writes on subjects from Aviation to Zoos. Please contact Matt for your next article needs at http://www.thearticlewriter.com

In The News:

Business is booming for debt-consolidation companies as more ...
Bizjournals.com, NC - Nov 17, 2008
“Last month was the biggest month we ever had,” said Craven, president of Debt Settlement USA in Scottsdale. The national company, which operates in 29 ...

Working to Thaw Credit Markets: Social Lending Site LendingClub ...
MarketWatch - 2 hours ago
... as debt consolidation, home improvement, launching a new business venture, returning to school or for assistance with hundreds of other life events. ...

Athens Township: ATA Prez.: Debt consolidation could eliminate ...
Morning Times, PA - Nov 17, 2008
Debt consolidation has worked well for other municipalities facing similar situations, said Steiner. “That was one of the recommendations we got from our ...

Deleveraging Must Continue
Wall Street Journal - 15 hours ago
... it is of overwhelming importance to make a clear distinction between the deleveraging process within the financial sector and debt consolidation in the ...

Budgets help curb holiday spending
Belleville News Democrat, USA - Nov 19, 2008
Debt Consolidation Guides (www.debtguides .org/debtconsolidation .html) --Discusses types of debt, debt management and debt solutions. ...

Processes for consolidation, dissolution laid out for area school ...
McLeod County Chronicle, MN - 18 hours ago
But whether there is one or more consolidation partners, Hopeman said, a consolidation plan has to address some "key ingredients." • Address bonded debt. ...
3 districts still involved in McLeod West talks McLeod County Chronicle
all 2 news articles

Town debt to be deferred under a plan of Corzine's
The Star-Ledger - NJ.com, NJ - 9 hours ago
Corzine also will stress that towns should consider consolidation and sharing services to cut costs, according to a senior administration official familiar ...

Perry Ellis International Announces Results for Third Quarter ...
StreetInsider.com (subscription), MI - 2 hours ago
Its debt-to-capital ratio at 43% is equal to the debt-to-capital ratio for the same period last year. Excluding the $33.1 million related to the acquisition ...

Shop around for new insurance quotes
Philadelphia Daily News, PA - Nov 19, 2008
One recent participant used the debt-consolidation portion of a loan to pay off $1413 in credit card debt that had been carrying an 18 percent annual ...

Fitch Affirms Children's Specialized Hospital (New Jersey) at 'BBB ...
MarketWatch - 17 hours ago
Management has taken various steps to reduce costs, including cutting staff positions which were redundant or money losing, the consolidation of the its ...

debt consolidation - Google News

7 Ways to Consolidate Your Debt

Debt Consolidation Debt Consolidation