For those who have multiple credit card balances, credit card debt consolidation is a smart solution to lower your monthly payments, reduce interest costs, and shorten the payoff period. What options available to you depend on a lot of factors, such as your credit score and history, how much debt you have, whether you have any property or investment, etc. Credit debt consolidation may hurt your credit score if the lender performs a hard credit query. But in the long run, after you pay off all debts, your score will be improved. If you want to pay off all your debts, read on to find out the best ways to do it.
Refinance with a Balance Transfer Card
Most balance transfer card offers require an excellent credit score (in the range of 690 plus). You may be charged a transfer fee (typically 3-5% of the transferred amount). Some even require an annual fee. To make up for the costs, balance transfer cards offer an introductory period that varies from 12 to 18 months during which no interest is charged. Your goal is to pay off all debts before the introductory period ends.
The best option for obtaining such loans is a credit union. Credit unions are not-for-profit organizations that are able to offer loans at lower interest rates and more flexible terms than online lenders. Online lenders often don’t require a hard credit query so your score won’t be affected. However, to get the lowest rate possible from them, you need an excellent score.
Home Equity Loans
Only resort to this type of loan if you are sure about your financial situation and the ability to pay off your debts, because you are putting your home at risk. The benefits? Lower interest rates than unsecured personal loans and longer payoff periods.
If your credit card debt is out of control, or not up to par with your expectations, call us! We can help you set up a goal to get rid of your credit card debt this year. Contact us now for a free consultation to make an educated choice for consolidating your debt.