The initial step in consolidating your payables is to sum up the totality of your debts. The next step is to establish how much money you make each month and see whether the income is more than enough to pay the amortization of the debts. You then list down in one sheet of paper all of your credit card balances and other personal loan and on a separate sheet, all the sources of your income. Once you’re done, you can now analyze your current financial situation by simply looking at these two sheets of paper. You can now make a decision on whether there is a need for you to manage your debt better by consolidating all your existing payables into one single debt. If you find there is a need for consolidation, here are some debt relief options that you can use.
Transfer Credit Card Option
For those with small or medium amount of debt, one solution is to transfer the high interest credit card balance into a 0% interest card. Most credit card companies offer this to their old but reliable credit card clienteles. However there could be a transfer fee involved and the repayment terms are usually not more than 18 months. Your loan can be interest free if you can get this option allowing you a more manageable debt situation.
You can apply for these in banks or from a money lender. However, this loan is unsecured so the interest may be in the range of 7 to 20% depending on your credit rating, amount of loan and repayment terms. There may also be an origination fee that may be charge for this kind of a loan.
Home Equity Loan
You can usually get this from banks or from your credit union by using your home or other properties as collateral. The interest rates for this loan is lower than those charged by credit card companies or from a personal loan provider. However Equity loans are quite risky considering that if you default from the loan a foreclosure on your home is imminent.