Most Americans have some form of debt, from student loans to medical bills to a mortgage. For some, that debt can become overwhelming, especially when you have several accounts. Therefore, many people can benefit from consolidating debt. There are businesses like Symple Lending and ways you can work with existing assets to help you.
Use Credit Cards
One of the most common forms of debt is credit cards. Some credit cards have explosive interest rates that can take much longer to pay back. However, if you get approved for a credit card with a lower interest rate and a high enough balance, you can transfer the balance to the new lower interest rate one. With a lower interest rate, you’ll be able to save money over time and pay your principal faster.
Refinance Your Home
For most people, a home is their greatest and most expensive asset. Take a look at your existing mortgage and see if it’s worth it to refinance it. When you refinance your mortgage, you replace your current mortgage with a new one for better terms. This new mortgage works by paying off your old one as you start making payments on the new loan. The terms may shorten or lengthen the payment period but with the lower interest rate, you also benefit from adding more to the principal as you pay it off. Some homeowners get a fixed rate or an adjustable-rate mortgage. Some people also do a cash-out refinance by borrowing more than what they owe and taking the difference in cash.
Consider Home Equity
It may also be worth it to borrow against your existing home equity. Depending on how much of your mortgage is already paid off, it’s like having cash in a bank, but the bank is really your home. With a home equity loan, you can pay off other types of debt in a lump sum while still holding onto your home asset.
Get a Consolidation Loan
Then, there are the specific consolidation loans that combine multiple debts into one loan. A consolidation loan can be a personal loan from Companies like Symple Lending or a student consolidation loan. With this one loan, you no longer have to handle multiple accounts. You’ll make one payment each month on a brand new loan used to cover your previous separate ones.
Check Retirement Plans
While it should be used as a last resort, you can also look into your existing retirement plans. Some people may borrow against their 401(k) early. At least, it’s usually low interest. However, it can also result in penalties if you don’t pay it back quickly.
Living with high debt can be overwhelming, but you’re not alone. For many people, consolidating debt can give them peace of mind through one big loan with a lower interest rate. Instead of juggling several ones with several due dates, take care of everything in one payment once a month.
