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Types of Debt Consolidation Loans
You can consolidate debt by using various kinds of loans or bank cards. Which will be best for you depends on the terms and forms of your current loans as well as your current financial situation.

You can find two broad forms of debt consolidation loans: secured and short term loans. Secured finance are backed by a secured asset like your house, which serves as collateral for the loan.
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Unsecured loans, on the other hand, aren't backed by assets and may be more difficult to get. They also tend to have higher interest rates and lower qualifying amounts. With either kind of loan, interest rates remain typically lower than the rates charged on bank cards. And in most cases, the rates are fixed, so that they won't rise over the repayment period.

With any type of loan, you will want to prioritize which of one's debts to pay off first. It often is practical to begin with the highest-interest debt and work your way down the list.
Home page can be an unsecured loan from a bank or credit union that provides a lump sum payment you may use for just about any purpose. You repay the loan with regular monthly payments for a set period of time and with a collection interest rate.
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Personal loans generally have lower interest rates than credit cards, so they can be perfect for consolidating credit card debt.
Credit Cards
A new card will help you reduce your personal credit card debt burden if it offers a lower interest rate.

As mentioned earlier, some bank cards offer an introductory period with 0% APR once you transfer your existing balances to them. These promotional periods often last from six to 21 months roughly, after which the interest can skyrocket into double digits. So it is best to pay off your balance, or as much of it as it is possible to, as quickly as possible.

Remember that these cards may also impose a short fee, often equal to 3% to 5% of the total amount you are transferring.

Home Equity Loans
If you're a homeowner who has built up equity over the years, a home equity loan or home equity line of credit (HELOC) can be quite a useful solution to consolidate debt. These secured loans use your equity as collateral and typically offer interest rates slightly above average mortgage rates, which can be well below charge card interest rates.
Student Loans
The government offers several consolidation options for people with student education loans, including direct consolidation loans through the Federal Direct Loan Program. The brand new interest rate is the weighted average of the previous loans. Consolidating your federal student education loans can lead to lower monthly payments by stretching out the repayment period to so long as 30 years. However, that may also mean paying Loan consolidation over the long term.

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