Is your life being consumed by debt?
There can be help with debt closer than you think. Not all of these suggestions may be for you, but they all offer debt relief for an individual that needs help getting out of debt. The experts offer the following suggestions for consolidating your debt.
1. A consumer credit counseling agency should be your first option. These nonprofit agencies are excellent at helping consumers get out of debt. Their counselors will get your fees waived and your interest rates reduced. You will make one monthly payment to them and these credit counselors will disburse it to your creditors. Using this method of debt consolidation will require more disciplined spending habits and a more structured lifestyle.
2. Home equity loans are another good option for debt consolidation. These loans usually come with low interest rates and the interest is tax deductible. The pitfalls that come with home equity loans are that you must be creditworthy and they will require your home to be put up as collateral. To reach debt freedom this loan should be paid back aggressively because they usually have long payback periods. You will pay a substantial amount of interest if you don’t pay it ahead. Remember that if you do not stop using your credit cards, you will find yourself back in debt again.
3. Credit card transfers can be used to consolidate debt. Balance transfers only make sense if you can pay the credit card off before the introductory rate expires. Be sure you fully understand the terms and conditions of these balance transfers. In most cases, any late payments will void the introductory rate and will cause the default rate to go into effect.
4. A loan can be taken out against the cash value of a whole life insurance policy. There is no set repayment period on this type of loan and it does not necessarily have to be paid back at all. However, the amount of the loan will be deducted from the payout that your beneficiaries will receive.
5. Retirement accounts offer another option for debt relief. Most 401(k) or retirement plans are setups so that you can borrow from them. This is a debt consolidation option that should be used only as a last resort. You will pay it back to yourself, the interest is not tax deductible and the IRS will access taxes and penalties if it is not paid back within five years.
These methods of debt relief may not be for everyone, but they will get you out of debt and will get you the debt relief you are long for. This will enable you to move forward with your life and find financial freedom.