1145 consolidate debt consolidating credit 1650

04 Dec

Generally, personal loan interest rates are lower than interest on other types of unsecured debt, so you’ll save money over the life of the debt.

They’re also fixed-rate loans, so the interest rate won’t fluctuate the way a credit card rate can.

A personal debt consolidation loan can also help streamline your payments; you’ll deal with a single payment to the lender, rather than trying to manage multiple payments to several different creditors.

However, if your credit score is low and your credit report has some blemishes, it may be difficult to get a personal loan.

What’s more, if you continue the credit use habits that got you in trouble in the first place – like not making on-time payments – you could wind up even deeper in debt.

Another option for people with good credit scores may be to transfer balances from high-interest credit cards to a card with a lower interest rate.

This approach can work if you know you’ll be able to pay off the entire debt before the promotional period expires.

It’s also important to avoid making additional credit card charges while you’re paying off a high balance to not further increase your debt.

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Another option — and one that many people consider as their first step — is to contact your creditors directly.

The act of opening a credit card can be helpful or hurtful depending on your credit history.

An inquiry can negatively impact your credit score.

You have multiple options for debt consolidation: Each option has advantages, disadvantages and challenges.

Here’s a closer look: If you’re struggling with debt, you may have already been approached by companies that promise they will help you wipe out your debt. Such companies may charge you hefty fees for consolidating your debt, and it’s possible to wind up even further in debt if you don’t fully understand the company’s fees and conditions.