Credit card debt can be something that is difficult to deal with, as it can have drastic implications on one’s credit score. Consolidating credit card debt is a method used by many in order to reduce monthly payments, which can help save you money. There are multiple ways that credit card debt can be consolidated.
There are many factors that go into which method you can use, and they are primarily based on the strength of your credit history and your current financial situation. Here are the best ways to go about consolidation.
Apply for a Personal Loan
A personal loan is a common method used to consolidate debt, and funds from a debt consolidation loan could actually be used to pay off the remaining balance on a credit card. Instead of making monthly payments, you’d simply make one payment for the personal loan itself.
If you happen to have good credit and have proven to be responsible with your finances, you may actually qualify for lower interest rates. Interest rates can be devastating if you have credit card debt, and Golden State Partners are experts in the industry that can assist you if you are having trouble.
In addition, certain lenders will send payments to the creditors directly. This can help you avoid the temptation of spending the loan money on something else.
Balance Transfer Credit Cards
A balance transfer allows you to move balances from multiple credit card accounts to a different card. Balance transfer credit cards come with a big advantage in the introductory 0% APR for a certain amount of time.
If you are able to pay off the balances you transfer prior to the start of the introductory period, you could potentially avoid paying interest on charges of the transferred balance altogether. However, you should be advised that the promotional period is only for a limited time and if you do not pay it off in time, the remaining balance will negatively impact the interest rate.
Ask Help from Friends and Family
This may all depend on what you owe and how bleak your financial situation looks like. If you are strapped for money, you may ask a loved one to lend you the money. If they are willing, they can give you what you require for the time being.
You should be advised that personal relationships are often fractured because of financial mishaps. Therefore, if you go this route, the terms of the loan and a clear plan of repayment should be clearly outlined. Treat this no different than if you were applying for a loan from a bank or other financial institution.
Of course, the biggest advantage of doing so is that there are no eligibility requirements. Odds are that if you reach a point where you have to ask loved ones for necessary financing, you would be denied a formal loan from a financial institution. In addition, you may also get lower interest rates.
As you can see, consolidating credit card debt is something that is useful for many people to handle credit card debt. Credit card debt can have a drastic effect on your credit score and other areas in your life. Golden State Partners contains valuable information and resources for you to use to help in your journey
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