When your bills start to pile up, you probably wonder how you will ever get out from under them. There are a lot of options for people who need help with existing debt; however, be careful that you choose the right plan for consolidating your debt.
Balance Transfers
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If you have a few credit cards with varying interest rates, consider opening up a new credit card with a low APR. Sometimes you can also find a special deal that offers a zero-percent APR for the first year. Make sure there are no penalties for transferring balances before opening a new credit card. Transfer the balances on all your existing credit cards to one card with a zero or low APR, which will save you money while you pay off the one card. Be cautious, however, about closing existing cards as that can actually negatively affect your credit.
Personal Loans
If you want to streamline the process, consider taking out a personal loan to pay off your existing debt. By taking out a loan, you can pay off high-interest credit cards, and other existing debt, and then make only one payment to pay off that loan. Although you can check with your bank, an easier option is getting a personal loan through Avant, allowing you to complete the entire process easily online. Personal loans streamline the process of paying off debt, and can help you get a lower interest rate, which saves you money over time while you pay off your debt.
Debt Management Plans
Many debt-counseling companies offer a debt management plan similar to a personal loan. You arrange for a plan to fit your needs, and then the company handles paying your bills or loans. By having a debt counseling company pay your lenders, you eliminate the risk of missing a payment or falling behind. Many times, there is a fee associated with these plans; however, sometimes companies waive their fees.
Debt Counseling
Even if you don’t want to set up a debt management plan, you can try debt counseling with either not-for-profit or for-profit agencies. A debt-counseling session with a trained and passionate counselor helps to outline your current expenses and your income to create a plan for paying off debt. Sometimes your best option is to consolidate your debt, but your counselor might offer alternative solutions. These agencies may also negotiate lower interest rates on your behalf.
Other Considerations
Tread carefully when deciding your best options for handling existing debt, whether you get a Lending Club loan or seek debt counseling. If you take out a loan, make sure you don’t start charging on the credit cards you’ve just paid off. Research a debt counseling company very carefully to make sure they have the right intentions. Finally, be careful when transferring your balances to make sure you don’t do anything to negatively impact your credit.
Don’t rush into anything if you’re considering consolidating your debt. Weigh the pros and cons of all your different options, and enlist the help of a professional to help make the best decision.