Starting to feel a little pressure because of your debt? You might think about consolidating that debt into one loan—but how to do it? Here are 4 options:
- Transferring the balances to a credit card. For some people, that’s dangerous, because that’s how they got in debt trouble to begin with. If it seems right for you, be sure to ask about balance transfer fees on the new card so you’ll know what the transfer will cost you.
- A home equity loan or line of credit. A home equity loan is typically for a fixed amount, while a line of credit is more like a credit card because you can use as much or as little of your credit limit as you’d like. Interest is usually tax deductible, and rates are low, but you are risking something. Your house.
- A personal loan. It’s not secured so you’re not risking your home, but you often need good credit to qualify.
- Borrow against your 401(k) or IRA. Remember this: If you borrow from your 401(k) and you get fired, you have to pay it all back right away. And you’ll be losing any growth you would have earned on those accounts while the money is out of them.
Ask questions so you make the right choice for you, and you could have that fresh start you’ve been dreaming of.
Do us a favor please. Tell your friends about us so they can be smarter about their money too.