Debt & Credit

How to Consolidate Your Credit Card Debts?

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The process of combining the balances of multiple credit cards into just one monthly payment leads to the consolidation of credit card debts. It is seen that the monthly payment of the balances carries a low rate of interest as compared to the one which is being paid by the person in the current scenario. The consolidation of credit card debts is a time-consuming process; a lot of different methods are required. An application process is made use of in order to check whether or not the person is approved first, and this further leads to the process resulting in hard credit inquiry causing the credit scores of the person to drop a couple of points. In order for a person to describe which credit card consolidation will suit the person best, the following ways can be taken into account.

1. Working with a non-profit credit counseling organization

The credit counseling organizations carry the ability to review the respective financial position, and it further works with the person for the creation of such a plan which will play a key role in tackling the financial challenges. Pieces of Advice linked with credit card problems are given, in addition to this, budgeting and money payment problems are also dealt with.

If the person chooses to work with any credit counselor, first and foremost, it is crucial to carry out in-depth research linked with the organization before starting. A great way to achieve this is to check with the respective state attorney’s general office as well as the consumer protection agency in order to make sure that it is reputable.

The main feature of this organization is that it works with the respective creditors for the purpose of setting up a proper debt management plan on the concerned party’s behalf. This method requires the person to make one payment to the counseling organization in a month. The money which is provided by the person is made use of by the organization in order to make payments to the creditors. The credit counselor of the concerned party also carries the chance to work with the respective creditors in order to reach the lowest rates of interests or even the waive fees.

2. Application for a personal loan

There is absolutely no denying of the fact that personal loans can be used for the consolidation of debts, the respective funds taken from any debt consolidation loan can further be made use of for the purpose of paying off the credit card balances. Rather than having to make multiple cards related payments every month, personal loan demands the person just to make one payment.

If the person has good credit, there is no doubt that the person may be able to qualify for the low rates of interests which is applied on a personal loan, as compared to the rates which are normally charged by these institutions. Flexible repayment terms are offered by the personal loans as compared to the rates which were being charged by the credit card issuers. The person can also make the decision of selecting on which will suit best for his/her respective budget.

There are some lenders, who will not think about anything and directly send the due amount to the creditors, this will play a key role in stopping the person from being tempted to use money from the loan funds. There are a lot of lenders which provide the person with a chance to apply for prequalification, and the person can make the decision of shopping around to see the options they carry the status of being rather potential options without leaving any sort of impact on credit scores.

3. Make use of a balance transfer credit card

This specific type of credit card plays a key role in transferring the respective balances from one or even more credit card accounts to a completely different account. Often times an introductory zero percent APR is offered on the balance cards, for the balances which are sent within a specific amount of time. If the person pays off all the balances, he/she gets a chance to transfer the respective amount before the expiration of the introductory period. This further saves the person from having to pay for various charges such as the interest charges which is applied on the balance which is transferred altogether.

4. Asking a family or friend for help

It also greatly depends on the respective amount of money which is owed by the person and should be completely knowledgeable about their respective financial position. This will help in the person being able to present the idea of taking a loan in front of his friends or family members, now whoever thinks that he/she is right and his/her respective financial position will allow him/her to pay back the amount. If this method is opted for, then one thing which needs to be understood in a very critical manner is that the respective person needs to make sure that the mother is fine and the terms and conditions of the loan are outlined in the best possible manner. This would have been the same case if the person had planned to get the loan from some friend or family member. At times when people take the decision and actually borrow some money from a person they know or have a relation with, there is no hard and fast need that the person needs to fulfill the requirements so that he/she can further be able to qualify the loan which has been applied for.

5. Auto refinances cash out

There are some lenders who provide the person with a cash-out auto refinance which provides the person with a chance to use the car with without any issue or loan. There are various expenses which will not meet to be cleared. This further leads to the consolidation of credit card debt. If the person is unable to meet the timely payments, if the amount is difficult to arrange or something, then the vehicle will be lost and then recovered.

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