There's Helpful Debt Consolidation Options

There are numerous debt consolidation options available. These include using the equity in your home to get a debt consolidation loan, working with a credit counseling agency or arranging for a line of credit that is large enough to cover all of your debts into one payment. It makes sense to investigate the options available to you for debt consolidation.

How to Use Your Equity for Debt Consolidation There are generally two ways to effectively use the equity in your home for debt consolidation. You can get a second mortgage or a home equity line of credit. There are both advantages and disadvantages to using the equity in your home to get a loan for debt consolidation. The advantages are that you can lower your monthly financial obligations and improve your credit rating. Credit counseling agencies can also get you out of debt immediately, as opposed to longer-term solutions. The disadvantages to this debt consolidation solution include that if you don't make your payments, you can lose your house. Also, because your credit rating is poor due to your debt issues, it can be hard to find a reputable lender and a good interest rate.

These agencies contact your creditors and make a deal with them for payment. You then make monthly payments to the agency that disburses them on your behalf to your creditors. This can be a good way to get out of debt, but it is more long-term and you have to make sure that your payments are on time or you will be right back where you started.

Using Charge Card Consolidation Charge card debt consolidation is one of the more risky choices when it comes to debt consolidation. Charge card debt consolidation involves getting a charge card with a limit that would cover all of your current debts. Once you get this credit card, you can then pay off your other debts and have only one payment that is hopefully lower than what you were paying on all those other debts. The major advantage of this option is that you don't have to get a loan or endure the embarrassment of working with a credit counseling service. You pay off your debts all at once, but still have a payment to your new credit card. It can be tricky to find the right kind of card to accomplish this goal, but it can be done.

Disadvantages of Charge Card Debt Consolidation While this may seem like a very good option, there are a lot of disadvantages associated with it. For instance, the introductory interest rate on the new card might be low to begin with, but it will eventually go up. You are also not really getting rid of any debt; you are just transferring it instead of confronting the problem head on. In addition, getting another charge card is probably not the best choice if you are already in charge card hell. You may start with the good intentions of paying if off, but once you start getting room, you will probably find excuses to charge more stuff.

Do You Qualify For Debt Consolidation? When you are in debt, it seems like whatever the dollar amount is tends to be overwhelming. You think about the number in your head and feel awful about it. You wonder if you will ever be able to pay it off, and you hope that if you approach those who specialize in helping you consolidate your debts they will not faint away over the amount. But perhaps you don't have a lot of debt, but it has gotten out of control for whatever reason. It seems like a small amount compared to the amount of debt you have heard about. Yet, you still feel that you need help. To find out if you qualify, there is information located on the Internet.