Finance & Loans
Debt consolidation options
November 28, 2011 by creative · Leave a Comment
In the present economic situation many are the people who are overburdened with high interest credit card debt and looking out for ways to relieve themselves of this burden. Debt consolidation is one such means and involves combining multiple repayments into one single payment. There are 4 ways how debt consolidation can be done:
Debt consolidation through personal loans
This is used for smaller amounts and there is usually no collateral which means it will have a very high rate of interest.
Debt consolidation through refinance
This option was mainly used by home owners when the housing market was good and loans were easy to obtain. But it is not a viable option in the current market situation where the housing prices are very low. You also face the risk of losing the house if you are converting an unsecured loan in to a secured loan.
Debt settlement
One will be able to greatly reduce the amount owed as well as waive off interest payments and financial charges and will enable the person to clear the debt faster though it will have an impact on his credit score.
Debt management plan
Enables the person get relief in the form of reduced interest rates, consolidated payments, waive off late fees while clearing the debt.