When you own multiple debts, it may seem easier to pay all of them off with a single debt consolidation loan. Then, you will only need to make one low monthly payment to pay off your debts. However, there are more and less effective ways of consolidating your debt, and you will want to speak with a debt consolidation attorney about the best options for you.
A Credit Card Balance Transfer
Some credit cards have a low introductory APR, or you may even pay 0% APR for 12 months. This will give you a year to pay off your debts before your interest rate goes up again. However, if you are not able to pay off your debts within the introductory period, your credit card interest rates will likely go up suddenly. Also, you will want to make sure that you don't make any purchases.
You may be able to obtain a personal loan with a lower interest rate if you have a great credit score and if you have a large enough income. Then, you will only have to make one monthly payment to the same location rather than several monthly payments. A professional debt consolidation specialist may assist you in finding the right bank or credit union to receive a personal loan from.
An alternative to a personal loan is a debt consolidation loan. These tend to have lower monthly payments. The downside is that you will likely pay more money in the long term, but it might be the best option for you.
Your Death Benefit
If you have life insurance, you may be able to take out a loan against the value of your death benefit. After this, you will be able to pay off your debts, and your life insurance policy will pay out less to your beneficiaries. The cash value of your death benefit must be good enough to cover the loan amount.
A Home Equity Loan
With cash-out refinance, you will be able to borrow against the equity of your home. Home equity loans usually come with low interest rates, and you will have a very high borrowing cap.
However, you will only be able to take this approach if you have a high credit score. But only a debt consolidation attorney will be able to evaluate your personal situation and will be able to recommend a debt consolidation option that is right for you.