Home Equity Loan
A home equity loan is secured based on the equity in your house. To apply such kind of loan, you should own a certain amount of equity and a good credit. The advantage of the home equity loan is that it has a relatively lower interest rate. However, once you fail to repay the loan, you are likely to face foreclosure on your house. Therefore, you are generally not recommended to take this loan as the debt consolidation loan.
You may combine all the credit card payments into a brand-new credit card. By doing so, you can get a lower interest rate. Yet you should notice that the low interest rates of the balance transfer can go expired after a certain period of time. Therefore, you should try to figure out when the low interest rate will expire and what the final rate will be after it expires. In addition, you should also be aware that placing too many payments on a single credit card can greatly hit your credit score, though you may let it rebound after you pay down the balance. To apply for a credit card balance transfer, you need a credit card with a large credit limit plus good credit record.
A personal loan is an unsecured loan. It has a fixed payment within a set period of time. If you can borrow a large loan to cover all the balances, you may use the personal loan to consolidate the debts. Applying a personal loan entails a good credit. Bad credit may lead to a higher interest rate or even failure to get the loan.
The federal government offers people student loans for consolidation. Through the Federal Direct Loan Program, you can get direct consolidation loans. Student loans can help you release the burden of the college tuition, room and board costs as well as other necessary college expenses. The disadvantage is that once you get a student loan, you may not be able to pursue other financial goals. While a student loan can help build your credit, it can also damage the credit score if you default on it. Requirements of applying student loans may include a valid social security number, a high school diploma or equivalent, enrollment in an eligible school and a good standing with federal financial aid, etc.