It is certainly possible to repay all your debts a lot faster than you would have thought possible. There are many tools and loans available to help you get rid of debt.
Never go in for a straitjacket formula for clearing your debts. Each person has a unique problem and it must be treated uniquely. Choose the strategy that fits you best. Given below are some ways to extract maximum out of your consolidation loan.
1 - Consolidation of Bills for Homeowners
If you own a home, reducing your debt quickly is a lot easier. Your house shall have a portion of its value free from all debts. This is called equity. This is built up over a period of time. If you want, you can sell or mortgage this equity. This loan can be used to settle debts.
You can go in for either a refinance of mortgage or equity loan. There are good and bad aspects of both deals. The onus is upon you to analyze it and choose the right option.
Before deciding to opt for a particular option, make sure you understand your condition well. Bringing in a mortgage expert too may work to your benefit.
A Good Credit Rating Is More Valuable Than You Thought
What if you do not own a home? Then the home equity option is not going to work. Then you may have to opt for a personal loan to consolidate your debts.
2 - Opting for a Personal Loan
Getting these loans is not very easy. You should have sufficient income and a good credit score. This is essential if you intend to approach banks. Even then, you will have to pay a high rate of interest. To get your loan approved faster at a low rate, you should offer a collateral asset.
3 - Debt Management Service
If you do not own a home, then banks may not be ready to help you out. Instead, you can go in for a debt management service instead. They offer good service without rigid credit checks.
What do these services do? They consolidate all your loans into one big debt. They bring down your interest rate through negotiations. You can save as much as $60 for every $100 repaid in the past. You can aim to become debt free in half a decade.
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