Debt Consolidation Be More Beneficial

Consolidate debt as much as possible is the one important plan if you want to build good credit. Although many people would suggest getting a consolidation loan, it is not always an option if you actually owe a lot of money.

Here are two options that can actually be more beneficial.

Tap Into Your Home’s Equity

If you have a Home Equity Line of Credit (HELOC) or able to get home refinance, then this is going to be your best bet for getting out of debt fast. You see, when you get a Home Equity Line of Credit HELOC or mortgage refinance and take cash out, you are using the equity in your home to pay off your credit. This is beneficial because:

• Your interest rate can be as low as 5% saving you a lot more money then leaving balances on a credit card
• Your payments will be approximately 70% less then what they would be if leaving them on a credit card and
• The interest you pay toward a home loan will be tax deductible (whereas credit interest is not) and that tax deduction can save you even more money every year you have it. As an added bonus, transferring balances to your home equity will raise your credit score when it frees up your debt ratio on your credit cards.

Get a good deal on a balance transfer

If a refinance is not in your stars, then look to the credit that you do have. Call up your credit cards and ask them for deals on balance transfers. Many times, by simply asking, you can get 0% interest for a minimum of six months, or as little as 3% for the life of the debt. While you’re at it, ask if they will lower your interest rates as well. More often then not, they have no problem lowering interest rates, but you have to ask for it.