Online Money Advice

Your guide to Debt Consolidation

Debt Consolidation

Debt Consolidation is something of a holy grail for anyone who is in debt. Sleepless nights worrying about how you are going to pay the next bill are somewhat uncomfortable and do not contribute to the situation.

The first hurdle with being in debt is having the courage to admit that you are in debt and that you need help in getting out of it. It is seen by many as an addiction that needs to be treated in pretty much the same way.

Consolidation of your debt means just that consolidate what you owe and work out the best most affordable way that you can pay off your debt without getting even deeper into it or into trouble that will effect your long term financial future.

A number of ways you can do this are:

Take out a personal loan. If your debt is credit card based then you will benefit from this being a much lower interest rate by between 6% and 12% lower.

Refinance your car, yes it is possible but beware that the price of cars depreciate much quicker than property so it could end up being almost worthless before you need to buy a new one.

Home Equity Loan, if you have property you have an asset that will help you get out of debt much quicker and cheaper than if you have nothing. A home equity loan will have a much lower rate of interest and be over a longer term meaning your monthly payments are a lot less.

Negotiate better terms with the credit companies. Remember that paper you signed when you took out the loan or the credit card, well that was to protect the credit company from losses rather than you from debt but you can call the shots much more than you think when it comes to negotiating better rates and payment terms on what you owe.