The worst financial choices happen to even the seemingly most careful person. Within a short period, the wrong decision might leave you with debts that seem overwhelming. Some people opt to start hiding from their creditors and other embarrassing tactics to avoid the loan repayment.
There are however different proven tactics that a debt relief expert can offer for your debt repayment. Debt settlement, consumer credit counseling, declaring bankruptcy and debt consolidation are some of these tactics.
Debt consolidation might seem like a strategy that will not need the expertise of experts dealing with debt relief in Miami, FL. Most people who have chosen to go it alone in debt consolidation have been left with more debts than when they first began.
In debt consolidation, you will combine your debts and get a low-interest rate for this combined one. This is particularly effective if you are grappling with several high-interest debts as the low-interest rate loan will be far easier to manage. Here are your options for a debt consolidation loan.
Home Equity Loan
This will use your home’s equity as its collateral. If you have substantial equity on your property and good credit scores, you can qualify for this loan. The rates on a home equity loan are way lower than in other consolidation loans.
Unfortunately, you can face foreclosure if you do not make the repayments of your loan and thus it might not be the best choice if you are not guaranteed of meeting the debt repayments.
Credit Card Balance Transfers
This allows you to transfer your outstanding credit card debt into one credit card that has a low interest rate. In most cases, low balance transfer rates are promotional and will expire within a specified period.
As such, you should ensure you can maximize the timeframe of your low transfer interest rates to repay the debts before the regular rate kicks in. Your credit card limit in this type of debt consolidation loan should also be big enough to hold your entire credit card debt. Unfortunately putting too much debt into one card might hurt your credit score.
Personal Loans
These are unsecured loans with fixed repayment periods. Your credit rating will determine the amount you will get in a personal loan and the interest rates you qualify for.
In most cases, it might be hard to get optimal rates with so many debts, but either way, the rates you will get are much lower than what you will be paying for multiple loans.
Credit Union and Bank Loans
Most credit unions and banks have specific loans for debt consolidation. The rates of these loans are way lower than what you are currently paying. In some cases, however, you might end up paying more with an extended repayment period — which means low monthly repayments.
These consolidation loan options do not mean you are getting rid of your debts but are instead making it manageable. As such, you should not be tempted to borrow anymore until you have repaid the consolidation loan. Credit counseling is still essential to grasp better borrowing habits and avoid loans you cannot repay in the future.