subject: Debt Relief Solutions - Five Ways to Consolidate Your Debts [print this page] Debt consolidation is always tricky and if you don't go by the rules, you might land up in great trouble. First of all you must remember that debt consolidators are not doing everything for you, they are just there to consolidate your debts. Most people think that their debt overload will be looked after wholly by the middle debt consolidators. Here are some of the best tips various analysts offer for consolidating debts. If you own a home and have some equity in it, you have a couple of options that are relatively low in cost. These are pretty straightforward and simple. But judge them by you own discretion.
Take out a home equity loan. According to analysts, a home equity loan carries a fairly low interest rate, much in the range of single digits. Also the interest which you pay is tax-deductible which is helpful to you for many purposes. The present market offers fixed-rate loans mostly which carry a 15-year term and require that borrowers pay an origination fee of $75 to some hundred dollars. Other than that the cost of an appraisal and title insurance is incurred.
Do a "cash-out" refinancing: The second option for you is to refinance your property for a greater amount than you owe and use the extra cash to pay off debt. Incredible as it may seem, you get very low interest rates this way, but the payments will be stretched out for more than 15 years. The total interest cost over these years can wind up being pretty huge, so just keep this as your backup option.
Refinance your car: Though most of us don't think this way, the loan will be a secured loan. The danger there is that you may run out of car before you run out of debt. It's tough to buy a new car when you owe more than it's worth.
Get a personal loan: If at all you have not much damaged credit, then you might claim personal loans. Credit unions typically offer lower rates than banks, but the edge is that it can at least offer you about 11% and up. Still, that may be a whole lot less than the 20%-plus you're now paying to the credit-card company.
Negotiate with others: This final bit is the trickiest, but interesting option though. You can do this for yourself easily. But you need to be good with negotiations. Also professional customer service people might handle the issue much better.
Debt Relief Solutions - Five Ways to Consolidate Your Debts
