How to Consolidate Debt

How to Consolidate Debt - hero

Are you behind on your bills or having trouble keeping up with what you’ve paid and to whom? If so, you might be thinking about debt consolidation. Instead of dealing with multiple bills, you can enjoy the streamlined freedom of managing only one consolidated bill. Today, we’re looking at how to consolidate debt, wrangle up the loose ends and work toward financial health.

Personal Loan

The first option to consider is a personal loan. Folks with larger amounts of debt can take advantage of an Ultra Personal Loan, The Ultra Loan is a “no collateral required”, 72 month term, personal loan with a low fixed interest rate that’s far cheaper than a credit card. (A minimum of $10,000 advance is required to qualify for Ultra loan rates and term, hence why this loan is better for those with larger amounts of debt.)

If you’ve got less debt but would still like some help consolidating it all, consider a signature loan. You can get this unsecured personal loan without having to put down any property or assets as collateral. Use the funds to pay off existing lines of credit, then make one easy installment payment for the life of the loan. When you’ve paid if off, your credit score will be all the better for it because you’ll have decreased the revolving credit limit you’re using. For even more information, check out our blog post all about signature loans.

Balance Transfer

If you have the bandwidth to responsibly add a line of credit, consider opening a low-interest credit card and conducting a balance transfer. You can take advantage of lower introductory interest rates to put more funds toward your principal balance. Consolidating your number of credit card payments can help give you a head start on streamlining your funds to beat down debt.

A VISA balance transfer may be your answer to getting rid of higher interest rates. A balance transfer can help you save on interest by consolidating your higher interest rate debt balances onto a low-rate credit cards. Y-12 FCU members can move your high-interest debt to Y-12 FCU, with no balance transfer fee, and lower their monthly payments! Click here to learn more.

Home Equity Line of Credit

We’ve discussed the HELOCK in detail before—click here to see our previous blog post. The long and short of it is that homeowners can use existing equity in their homes to unlock funds when they’re needed. You can enjoy the benefits of lower interest rates, generally tax-deductible interest, and longer repayment terms than you might get with unsecured loan options.

There’s no limit to what you can use these funds for, so you can definitely use that equity to pay off existing credit cards and debt. The best part? You can also lock in a fixed rate at any time for terms up to 10 years. Click here to find out how Y-12 FCU can help you use a home equity line of credit to consolidate debt.

So, there you have it–three useful tools in your toolbox to working toward financial health. Learning how to consolidate debt is a vital step in moving forward toward financial freedom, and Y-12 Federal Credit Union is here to help every step of the way. Feel free to contact us with any questions or concerns you may have–we’ll help tailor an approach just for you!