Published On: Fri, Jan 15th, 2021

Tips On Consolidating Credit Card Debts

Are you suffering from the heavy burden of credit card debts? There are different ways to get the debts consolidated as per your situation. If you have credit card debts below $3,000, the best way to get it consolidated is through Zero-percent Credit schemes. In this scheme, you need to apply for a zero-percent interest rate credit card. Once you receive the card, get the pending balance amount transferred from your existing high-interest credit cards to the new zero-interest one. Another option is opting for a personal loan for repaying the existing debts. You could easily apply for a home equity loan, a second mortgage on your home, home equity line of credit or refinance your existing mortgage.

You can also borrow against your entire life insurance policy or even against your retirement savings. However, the most logical way to consolidate a higher amount of credit card debt (something above $3,000) is through a suitable debt management plan or debt consolidation schemes.  

photo/ Michael Jarmoluk via pixabay

Understanding the Debt Consolidation Loan Schemes

Debt Consolidation Loan or DCL offers the debtor an opportunity to make payments only to a single lender rather than making multiple payments to multiple lenders or creditors. Debt Consolidation Loans come with a fixed rate of interest. This interest rate is lower than what you are presently paying to repay the debts. So, naturally, DCL schemes help you by reducing the monthly payments while making it easier to get the debts repaid. DCLs can be categorized into different types, namely, zero-interest balance transfer on credit cards, consolidating student loans, personal loans and home equity loans. Go through debt consolidation reviews and you will realize that it is quite a popular option to bundle multiple bills into one payment and making the finance management process easier. Speaking of drawbacks, the repayment period can be a bit lengthy, but that is acceptable when you consider the benefits.  

Learning about Bill Consolidation

Bill consolidation is the option to eliminate your pending debts through a single loan. The process involves combining all your existing debts into one and then repaying the same, with a single loan. With this scheme, you are liable to make only a single loan repayment, on a monthly basis. If you have 5-10 separate loan repayments to be done every month, the bill consolidation scheme proves to be effective. Consolidating all the bills into one single payment would incur lower interest rates on the monthly payment scheme. The savings part can be utilized for starting any kind of emergency fund, which would help in preventing a financial crisis in the future.  

The best places to ask for consolidation loans are credit unions and banks. Also, there are quite a few online lending sites available that offer loans, under the best terms and conditions. Whatever or whichever way you approach; you must focus on the terms and conditions of the consolidation loan schemes. You must list all your pending debts carefully and find out the ones that you want to get consolidated.  Learn about the monthly payment policies and interest rates. This would help you in identifying your overall credit score.  

Author Bio: Jeffrey Richards is a credit counseling expert. He has written several debt consolidation reviews concerning credit card loan repayment.

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  1. Andy Brown says:

    Debt is the problem with many users. The main reason for most of the people for debt is credit card. When your credit card debt is spiraling out of control, it is not easy to manage the situation and you have to take help of debt consolidation. Online debt consolidation reviews will help you to get out of debt. If you have good credit, look for a credit card with a low interest rate. You can transfer high interest rate credit card balances to a single cards. Many people can get help though this article. Keep sharing such articles. Keep it up!

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