Debt Consolidation Options


How to consolidate debt, start saving

The average American household is in debt of more than $137,000. This burden can feel overwhelming.

Credit cards are a major source to painful debt. These revolving amounts average more than $5,000. per household. A consolidation of debt will help reduce the amount you pay and make your financial situation more manageable.

You have the time and resources to manage your spending and consolidate debt. It is important to cut down on your monthly spending so that you can consolidate debt and save money you can go to for more info.

What is debt consolidating?

Consolidating all your debts is possible by bringing them together in one bill. This can be done in two ways: with loans which pay off debts and create a single payment program. Or, you can transfer your existing debts into a single credit card. In both cases, you want to reduce the number and complexity of your bills each month as well as the interest that you pay.

Transfer Balances to Credit Cards

Balance transfers to new credit cards are a way to pay down small amounts of debt. Today’s cards often offer a 0% APR in the first year, up to 18 months. Other perks include cash back and a $0 transfer fee.

Only transfer debt to a different card if you’re receiving a better interest rate. If your card has a 0% APR, you should stop spending and pay your debt off. If you transfer more than the initial 0% interest rate, some cards will charge interest. This could be a costly mistake that can lead to financial problems down the line.

Good credit can get you higher interest rates on personal and house equity loans. This is a good way to consolidate larger debts.

Personal Loans

A personal loan can be one of the most effective tools for consolidating debt. Personal loans usually don’t need collateral and your rate of interest will depend on your credit history. These loans may have a higher APR than 30% depending on the lender. Discover Personal Loans have an average APR of 6.99% to 24.99%. Additional options are available for those with less-than-stellar credit ratings or who want to borrow greater than the typical personal loans lender can provide (the maximum loan amount Discover Personal Loans will lend is $35,000).

Home Equity Loans

Your home equity can be a vital resource to help you get back on your feet financially. Because they are secured by your home, home equity loans offer higher interest rates and are suitable for larger debts or long-term expenditures.

A home equity loan may be an option to consolidate debt.

  • Rates can be lower than personal loans or credit cards, but they are still better than unsecured loans.
  • Even if you have a lower credit score, your APR for a home-equity loan won’t be as high as an unsecured loan. Discover Home Loans offers rates ranging from 3.99% up to 11.99% APR*.
  • Fixed interest rate, terms, monthly payment amounts and fixed interest rate
  • You can borrow greater amounts than any other type of loan. The cost of Discover Home Loans ranges from $35,000-$200,000

A home equity loan may be an option for you if you have large amounts of debt from high-interest cards or loans. This will lower the interest payments and reduce your overall debt. This loan will help you get back on your feet quickly and allow you only to pay one bill per month. By reducing your bill burden, you can better manage your finances and stay on the path to financial stability.

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