Free Investment Advice

If you have a multitude of credit card bills, one option you can utilize to pay off most of them is through debt consolidation.

For example, let’s assume you have several credit cards with high interest rates.  The monthly payments are becoming more difficult to pay, and you feel as if the hole you are in is getting deeper and deeper.  There are several options available to you.

First, you can consolidate the debt by taking out a home equity loan.  If you have a good credit rating, meaning the FICO score is 700 or more, your chances of obtaining a loan are very good.

Second, you can obtain a loan from your bank.  Again, depending upon your credit history, the amount and interest rate will be determined accordingly.

Third, you can call each credit card company and renegotiate the interest rates.

Finally (and this is the last resort), if you have a credit card that is offering a very low interest rate, and if the interest rate will be set for more than a year, then you can use that card to pay off the high interest rate credit cards and just have one credit card bill to contend with.

If none of these options are applicable, the best advice most experts offer is to seek credit counseling with a certified organization.  This can help you reduce the interest rates, and perhaps work out a repayment plan with these companies to give you some breathing room.

However, the key to debt consolidation is that once you have paid off the majority of credit cards, it is incumbent upon you to cut up those cards (except one that should be kept for emergencies) and vow never to apply for new credit cards or begin using the ones you have paid.

If your credit is not considered the best, you can also ask a family member to co-sign a loan or, as mentioned earlier, take out a home equity loan.  However, with the value of homes in decline, it may serve you well to apply for a loan from your bank instead.

Debt consolidation can work.  Consider that if you apply for a loan, the monthly payments will always be the same.  The interest rate given at the outset will largely depend on your credit standing.  But the clear advantage is that there is only one bill to pay each month over a period of time.