What Are the Best Ways to Consolidate Debt?

Did you know that 80% of Americans have at least some debt? It’s one of life’s constant battles. And many are fighting it on multiple fronts. If you need a little debt relief, consolidating multiple debts into a single payment with a single lender could save you time and money. But what’s the best way to consolidate? Here are a few good options.

Balance Transfer

By transferring the balances of multiple existing credit cards, you can save time and avoid the hassle of having to remember several different credit card payments per month. Do your homework and find a new card with extra perks like a low fixed interest rate, reward points for purchases, and no annual fees. By choosing a card with a lower interest rate, you’ll owe less money over the life of your loan. And, right now you can get 3% cash back on the total amount of your transfer. That’s money in the bank just for making the decision to consolidate.

Debt Consolidation Loan

A low interest rate personal loan is another good option for consolidating debt. Especially if you have different types of outstanding loans like auto loans, credit cards, or a mixture of a lot of loans, a personal debt consolidation loan can make debt relief a lot easier. Look how much you’re paying in interest on your current loans. If you think you’re paying too much, ask about getting a better rate with a personal loan. Just beware of loans from so-called non-profit debt consolidation companies that come with extra fees. It’s always best to consolidate with a trusted community bank or credit union.

Home Equity Loan or HELOC

Another great debt relief option is a home equity loan or home equity line of credit. These loans use the equity in your home as collateral, making the loan less risky for your lender and a less expensive for you. Often, interest rates on these types of loans are a little less than traditional loans. In fact, some lenders even offer the option of switching between variable and fixed interest rates at any time, so you can lock in your rate and reduce risk or go back to variable interest when rates are low. Research the differences between a secured and unsecured loan to see which type of loan is best for you.

Whether you choose a balance transfer, personal loan, or debt consolidation loan, focusing on fewer debts can help you take control of your finances so that you can win the battle of debt relief.

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