How can credit card consolidation help you achieve a life without debt?

Imagining a life without credit card debt is always like a dream for most Americans. While the US national debt level is soaring high, more and more people are becoming aware of the ways they can consolidate their debts. While there are many ways that can help you drag yourself out of debt, debt consolidation is perhaps the best and the most convenient among them. There are many ways of consolidating your credit card debts and gaining a control over your distressed finances. Read on to know about them.

1. By transferring your balance to a low interest card: This is one of the most popular ways of consolidating your credit card debts. You can get many credit cards with low interest rate that can help you consolidate your debts. You can transfer your entire high interest balance to the low interest card and start making monthly payments with low interest rate and therefore reduced payments. But you need to be aware of the introductory period that lasts for a short period of time. It’s best if you could transfer your entire balance within the introductory period so that you’re not subject to outrageously high interest rates.

2. By taking out a home equity loan: You can also take out a home equity loan and consolidate all your unsecured debts with it. This option is good for those who have accumulated a huge amount of equity in their home. If you immediately need cash, you can easily take out a HEL or HELOC (Home equity line of credit). But make sure that you do not transfer a large amount of unsecured debts into your secured loan. Most people make this mistake as they are overwhelmed by the low interest rates and longer repayment terms. They end up losing their home to foreclosure. Always remember that you must be regular on your payments towards your secured loan or else you fall in serious financial trouble.

3. By taking a debt consolidation loan: The other way you can consolidate your debts is by taking a debt consolidation loan. You get low interest rates and reduced monthly payments with a consolidation loan. The biggest benefit of taking a debt consolidation loan is that you just have to make a single monthly payment towards the consolidation loan. As you go on making the single monthly payments, your debt consultant will make the payments to the creditor.

Therefore, if you want to realize your dream of leading a life without debt, consider debt consolidation. You can resort to the above mentioned options to reduce your debt burden and repay your creditors in affordable monthly payments.

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