As your vacuum picks up the last of the tinsel and the final
box of decorations is stored away for another year, you might wonder, "How much
financial damage did I do this holiday season?"
Undoubtedly, December can be a season of excess and many of
us are left with more debt than we had just a few months prior. Consolidating
debt is a helpful way to pay down those high balances faster.
There are several ways to consolidate debts, including
balance transfer cards, personal loans, and home equity lines of credit.
Balance transfer cards: These cards offer 0% APR for
balance transfers for 12 to 18 months. By transferring your existing credit
card balances to this card, you can save on interest during the promotional
period. This can also be a way to consolidate multiple credit cards into one
payment but be aware - balance transfer fees are usually 3-5% of the
transferred amount. After the promotional period ends, the interest rate
increases, often to 20% or higher, so you must pay off the balance within
the interest-free period. It can be perilous to put credit card debt onto
a new credit card, especially if you aren't disciplined when making
timely and impactful payments.
Telhio Credit Union's Platinum Credit Card offers 0% interest for 18 months, including balance transfers. For more details or to apply visit: The purchasing power of Zero | Telhio Credit Union Platinum Card (creditcardlearnmore.com)
Personal loan: This may be used to pay off credit
cards and consolidate multiple balances into one loan with a fixed interest
rate. Personal loans have lower interest rates than credit cards, especially if
you have good credit and they have a fixed repayment schedule which makes it
easier to budget.
A few reasons that a personal loan might fit your current
needs are:
- Funds
can be made available in a matter of days.
- The
lowest interest rates are reserved for borrowers who have good credit.
- You
receive your funds in one lump sum.
Because you get the loan payment all at once, it can be easier to make a large purchase, consolidate debt, or otherwise use the loan all at once. Plus, you'll get a fixed interest rate and predictable monthly payment, making the loan easier to manage, and helping you to avoid late payments.
Telhio Credit Union offers personal loans for a variety of reasons, including debt consolidation. For more details or to apply visit: Personal Loans, Line of Credit & Debt Consolidation Loans at Telhio Credit Union | Telhio Credit Union
Home Equity Line of Credit (HELOC): A HELOC allows
homeowners to tap into their home equity as collateral to borrow funds. This
can be a viable option for consolidating credit card debt, often at a lower
interest rate than most credit cards. Alternatively, a home equity loan provides
a lump sum with a fixed interest rate, making it a predictable and structured
solution for debt consolidation. However, it's essential to consider the
risks—missed payments could lead to foreclosure, so these options should be approached
with caution and a solid repayment plan.
With HELO terms ranging from 5 to 20 years, fixed or
variable, Telhio Credit Union has the perfect option to fit your needs. For
more details or to apply visit: Home Equity Loans at Low
Interest Rates at Telhio Credit Union | Telhio Credit Union
When considering debt consolidation, be honest with yourself. Consolidation can give you immediate relief, but you need to avoid using your credit cards. If you continue to use your credit cards, you may be in a worse situation than before.
Debt consolidation can hurt your credit score initially due
to a credit inquiry. Lenders use credit scores to decide whether to approve a
debt consolidation loan and the terms attached. But if done responsibly it can
lead to long-term benefits such as improving your credit score by making
on-time payments and reducing credit utilization. So, take a deep breath and
decide which debt consolidation path is the right choice for you. Then you can
start the new year off with a fresh start!
