credit card debt consolidation loan
You may be able to lower your cost of credit by getting a credit card debt loan through a second mortgage or a home equity line of credit.
These loans require you to put up your home as collateral. If you can’t make the payments — or if your payments are late — you could lose your home.
What’s more, the costs of credit card debt consolidation loans can add up. In addition to interest on the debt consolidation loans, you may have to pay “points,” with one point equal to one percent of the amount you borrow. Still, credit card debt loans may provide certain tax advantages that are not available with other kinds of credit.
If you do not have sufficient home equity, or some other form of equity, it may be impossible to get a credit card debt loan. If this is the case, for those consumers who are deep in debt, enrollment in a debt settlement program may be their only viable option. Doing so will likely provide credit card debt relief, while providing a means to become debt free over time.
A debt settlement lawyer negotiates on the borrowers’ behalf with creditors to reduce the overall debts in exchange for an agreement upon regular payments to be made. Only credit card and unsecured debts can be handled, not student loans, auto financing or mortgages. For the debtor, this makes obvious sense — they avoid the stigma and intrusive court-mandated controls of bankruptcy while still lowering, sometimes by more than 50%, their debt balances.
Debt settlement is even better than getting a credit card debt loan. Whereas, for the creditor, they regain trust that the borrower intends to pay back what he can of the loans and not file bankruptcy (in which case, the creditor risks losing all monies owed).
For some consumers a credit card debt loan may be their best option. This is particularly true for consumers who may have considerable debt but not enduring financial hardship. If the average interest rate on their various accounts is high, a debt consolidation loan at a low interest rate could save the consumer a significant amount of money over time.
Even if there is no significant change in the interest rate, the ease of making one payment each month may be reason enough to obtain a credit card debt loan.
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