If you are making multiple payments month after month, it can become difficult to keep track of your payments over a period of time. Also, the longer the repayment tenure, the more you will have to pay as interest. One way to manage your payments better and speed up the repayment process is through debt consolidation. In line with this, we’ve done our research and made a list of the best debt consolidation tips to help you save money.
- Get a balance transfer credit card: If you are carrying balances on multiple credit cards, it’s likely you are paying a substantial amount of interest on these payments. Getting a new balance transfer credit card that has an introductory APR of 0% can help you consolidate your credit card balances and repay it without paying the interest.
- Borrow against your home equity: If you happen to own a home, you can tap into this equity. This is, of course, not without risk. If you default on your payments, there is a chance that the lender may initiate foreclosure proceedings.
- Get a peer-to-peer loan: A peer-to-peer loan will help you borrow from individual lenders, without having to go through a financial institution. One of the key advantages of peer-to-peer loans is that they have low-interest rates, especially if you have a good credit score.
- Borrow against your life insurance policy: If you have a life insurance policy that builds cash value, you can borrow against it. If you do decide to borrow against your life insurance policy, it’s best that you repay this at the earliest. If something untimely happens to you before you’ve had the chance to settle your loan, your beneficiary will not benefit from the death benefit payout.
- Take a personal loan: You can also choose to get a personal loan to repay your debts. In comparison to credit cards, personal loans have a competitive interest rate. Further, they also have a longer repayment term, which makes it easy for you to pay back the loan. Since there are a number of financial institutions offering personal loans, you can compare your options and choose a loan that best suits you accordingly.
Once you’ve consolidated your debts, ensure that you make payments toward the new loan on time so you don’t face any hassles going forward.
