Above all, the approach has to match the need and the comfort level of the borrower.
A word to the wise, though: Debt consolidation loans aren’t for everyone struggling with debt.Determining which method will benefit you the most will involve some homework and some calculations … Debt consolidation can take many forms, including a personal loan, a balance-transfer credit card, a home equity line of credit (HELOC) and a debt management plan, among others. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward –- and free. " Debt consolidation is a strategy to roll multiple old debts into a single new one. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. We're on your side, even if it means we don't make a cent.HELOCs differ from home equity loans in that, instead of receiving a lump sum of cash, borrowers have an agreed-upon amount that they can take from their equity, and access as needed over time. There are two categories: a federal Direct Consolidation Loan and private consolidation or refinancing options.
You can consolidate most federal student loans with a Direct Consolidation Loan, which you can read more about here.
Enter your current debts into our loan calculator to start creating a plan to eliminate your debt.
While consolidating debt certainly has merits, it is not the right choice for every individual.
“It can be really overwhelming when you have five credit cards to pay and you don’t even know where to start.
I’ll sometimes float the idea of debt consolidation so they only have one bill to pay or so they can have a lower interest rate.” There are many options to consider when deciding to consolidate your debt, some of which work better in different situations.
Debt consolidation loans can be a great option, not only because it streamlines monthly payments, but also because, in many situations, you may get a reduced interest rate and lower total monthly payment.