Ways of Consolidating (Part III of III)
When it comes to debt, there are also those options that have to
do with credit cards. You can get a low interest or 0% interest
credit card and put your debt on that. However, if you choose to
go that route, you have to look to see what you are getting
yourself into. Much like the 0% balance transfers you have to
see how long the loan term is for. Not only that, but you need
to see what the transfer fees are when you move your debt from
one credit card to another. There are sometimes fees and terms
and conditions that make this not such a great deal upon further
inspection.
Then there are P2P loans, which are just person to person
lending clubs. You simply join a group like Prosper or Lending
Club where you borrow a certain amount of money for a debt
consolidation through one of these groups. The interest rate on
these debt consolidation loans is normally lower than it would
be at a bank or at a credit union, and many times the terms are
very good. However, there can be fees involved that make it not
as desirable, but they are normally not too bad. The only real
bad part is that they normally have a $25,000 cap on the debt
consolidation lending.
There is also the possibility of borrowing against your 401k.
This will allow you to borrow up to 50% of the amount of your
retirement balance and then you pay it back to yourself
basically. You have to pay interest on the loan, but the
interest is paid back to your retirement account. This is a good
way of getting a debt consolidation loan, but if you leave your
job after you have taken out this loan, you have to pay back the
amount you borrowed immediately. If you don’t pay it back, the
Internal Revenue Service will come after you with a 10% penalty.
Then again, you can use a combination of any of these debt
consolidation loans to get you through your rough patch – as any
of them are acceptable depending on your financial situation.
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