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6 Debt consolidation paths/options/ choices |
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Debt consolidation needs dedication and immediate action. Procrastination only leads to deeper debt and puts you on the path to bankruptcy court. What you need is a fool proof plan to consolidate and pay off the accrued debts. |
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| Author: Barry Allen |
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The ideal method is to seek debt consolidation advice which will point you towards a debt consolidation scheme with the lowest interest rate possible and the debt consolidation will not adversely affect your credit report or score. Aim to use a plan that will get you out of debt in 3-5 years.
Remember there are many ways in which you can consolidate your debt:
1. Use your credit cards: If you have a good credit rating you should approach your credit card company to help you consolidate your debts. Many card companies appreciate clients who are upfront and honest about their needs. According to debt consolidation advisors often accredit card debt consolidation may work out cheaper in the long run. Ask one card to take over all pending payments at a consolidated rate of interest. Many credit card companies may even waive transfer fees. Choose a plan that optimizes monthly installments and gets you free of debt in 3-5 years.
2. Consider a home equity loan: Many finance companies offer home equity loans as a debt consolidation option. In this you can get competitive rates, low payments, and the advantage of payments being tax deductible. Choose your loan carefully and opt for early closing options.
3. Cash-out-refinance is a workable option: In this finance companies allow clients to refinance their home equity and allow withdraw of funds to pay off bad debts. This scheme offers lower rates of interest but you need to study carefully the pros and cons.
4. Find out about debt consolidation loans: This is a personal loan that does not endanger your home or property that is held as security in the case of home equity loans. In this interest rates are often high and the payment term long, between 10-15 years. Find out if this option will suit your debt consolidation plan . Check out websites that have loan comparison tools like http://www.whatprice.co.uk/money-extra/personalloans-search.html and determine if you have the “best” and most feasible option.
5. Contact non-profit organizations like credit unions and local agencies. Very often these offers lower interest rates as well as free credit counseling services. Of course you or a family member needs to be a member of such an organization to avail of their debt consolidation schemes.
6. Use your pension or retirement plan to pay off debts: This is a viable debt consolidation option if you are young and have time to rebuild your nest egg. You apply to borrow against your retirement fund. Remember never withdraw however tempting it may seem. Weigh carefully the cost of your debts and the high rate of interest against systematic repayment into the retirement fund at a more workable rate of interest.
Since debt has become common all over the world and in the US experts are developing several ways to rid people of debt. Debt settlement, credit counseling agencies, and non-profit agencies are being set up to counsel people in debt and the World Wide Web has become a valuable source of information, advice, as well as tools that offer instant comparison of schemes as well as interest rates like: www.credit.com.
About Author
Barry Allen is a freelance writer for http://www.1888debtconsolidation.com , the premier website for free Debt Consolidation Services for loans, debt management plans, debt counselors, advice, loan payments and many more. He also freelances for Merchant Account Site http://www.1866merchantaccount.com
Article Source:
http://www.1888articles.com/author-barry-allen-2008.html
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