A credit card debt consolidation program would help you assess your debt situation in a better way. This program is devised in such a manner that the loan obtained through this program also covers all your other debts. The important thing is to choose the apt consolidation firm which gives the lowest interest rates when compared to your credit cards interest rates. Once you track on such a company, get the loan and pay off all your credit card debts. Now you would be left with only a single monthly payment to be taken care of. Furthermore as the interest rates on this loan is lower, so the monthly payments are also reduced to a large extent.
If you own a house and would like to opt for a secured loan, your interest rates would be generally lower. As credit card debt consolidation loans mostly have lower interest rates, your monthly payments would be less as well & you need to pay to only on creditor. But please note that though your payments are reduced, your term of loan would be higher.
Balance transfers are not the same as debt consolidation, as these are never a permanent solution. Often it has been seen that balance transfers are subject to fees which are a percentage of the total amount transferred or is a specific dollar charge. Though these are easy and convenient but are only helpful in moving your credit card debt around. You would still be subjected to late fees, high interest, and over the limit fees etc. if you charge up the balance on your new card.
Homeowners do have additional options to avail loans as you can refinance your 1st or 2nd mortgage and use this excess cash to pay off your high interest credit card debts. The 1st mortgage is refinanced at a lowered interest rate than the second. The vital point to consider here is that this actually changes your unsecured credit card debt to a secured one. This permits a lower interest rate.
Though these loans have many advantages, it’s not without risks. One should properly investigate about the debt consolidation company before acquiring its services. There are many fraud companies in the market capitalizing on the confusion existing among the in-debt consumers. As most of them are in a state of depression, thus are unable to adequately analyze the loopholes presented by some fraud companies. It’s you who should properly investigate about the company’s whereabouts, and stuffs like how long it has been in this business, number of satisfied clientele it possesses, the affiliations it has with accredited agencies like BBB etc before you enroll with any of them.