Question by Nancy R: Where can I get a loan to pay off some credit card debt without haveing to borrow against my house?
I want to get a loan to pay off all my credit cards and just make one monthly payment, but all I have found is home equity or refinance loans. I don’t want to borrow against my house, in fact I am able to pay my mortgage, car and credit cards on time and I have good credit. The thing is I would like to have more cash left over at the end of the month and pay off my high interest credit cards.
Answer by Clix
I have placed this in the source box. There is a wealth of information there and a great free debt management software program. I bookmarked the site as I return to it often for the advice it offers. I hope this helps you.
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You can’t and come out OK. Your house is your biggest asset and you need to use that properly. Do you wish to get in some kind of high interest loan again? No.
Refinance the house….. get some breathing room and down the road redo it again with the better credit you will have later. As long as you have credit card debt you are throwing money away.
Don’t get a new loan. You can ask the credit cards for a lower rate. Threatening to transfer your balance to a lower rate card is usually very effective. It works even better if you can quote the rate for balance transfers offered by another card.
I wouldn’t even consider borrowing against the house. The result would be converting UNsecured credit card debt to a MORTGAGE on your home. Why put your house at risk for credit card debt?
Consolidating debt is an ideal way to reduce your amount and tenure of debt. You make a single payment to one lender on a certain date and this will help you clear off the debts faster. But the fact remains that debt consolidation is not easy all the times. If you owe a lot of money, obtaining a consolidation loan at the lower rate of interest can be difficult. Choosing a high interest loan can increase your debt.
The primary aim to consolidate debt should be to reduce your total costs. To achieve this, you have to consider the following two points:
-Shop around for the loan with the lowest interest rate.
-Chalk out a strategy to clear off the debts in 3-5 years.
The following are some of the best methods of debt consolidation: