Proper debt consolidation will lead you to financial security and independence. Consolidation allows you to get new loans to pay off debts with a higher interest rate. The proper use of consolidation is a vital process. If you abuse debt consolidation, you can only aggravate your situation.
Get a new credit card. Debts can be combined by obtaining a new credit line and using its cash to repay and close an existing credit card or other debts. Those with a good credit history have every chance of getting a new loan. Debt consolidation is the best option for them. A new credit card must have a sufficiently large credit limit to consolidate all your debts into one payment.
Consider getting a credit card with the lowest interest rates. Interest rates must be necessarily lower than those that you currently have. You must save money, otherwise there will be no use in your consolidation. Use new funds wisely and direct them only to pay off existing debts.
Install a home loan to repay the loan. A home equity loan is one of the least expensive ways to consolidate a debt. This loan is attached to the value of the property, which means that you risk losing your property in case of impossibility of timely repayment. Since in this case, creditors do not risk anything, the interest rate is markedly reduced. You must have enough capital to get this type of loan.
Try to get a personal loan.
Commercial and private loans can be used to consolidate debt. Numerous commercial lenders offer them, but family and friends may also be an option. People with a bad credit history cannot always get a loan from professional commercial lenders. Sometimes, borrowing from family and friends can cause relationship problems. Consider this option carefully before using it.
Unsecured, commercial loans may have the same interest rate as your debt. Pay attention to this carefully. You must ensure that you receive a financially advantageous loan.
Work through consumer credit services and advice.
Although this is not a loan, consumer credit services and advice allow people to pay all their debts in a single monthly payment. Non-profit and commercial services are always available, and their goal is to help you consolidate a loan in one payment and negotiate with lenders on your behalf.
Consultants work with lenders to reduce your debt and create a payment plan that can pay off your debt as quickly as possible. Credit counseling can have a negative effect on your credit. Failure to hold back, according to the debt management program, will lead to creditors’ claims to pay off their debt in full.
How exactly to combine debts?
A single loan pooling scheme does not exist. After a thorough analysis of your situation and consultations with specialists, choosing a broker or other organization that is ready to take up your business, you need to prepare extracts from all MFIs in which you have active loans. These extracts must indicate the amount of the principal debt, interest rate and due date.
After preparing the package of documents, you attach to it a statement of Debt Consolidation and await the approval of the organization that agreed to conduct your business. It should also be remembered that such a service is usually available only to customers with an impeccable credit history. So that your efforts in negotiating with brokers and preparing documents are not in vain, it makes sense to know your credit history.