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Two Great Methods to Resolve Debt
Debt consolidation often occurs with either a secured loan or an
unsecured
loan to unite all debts. Consumers use the single consolidation loan to pay off
multiple high-interest debts and then make monthly payments to one lender.
Debt consolidation features many benefits for consumers to save money. The
following list provides the two best types of secured and unsecured methods
of debt consolidation:
Secured methods
- Home-equity loans provide borrowers a one-time lump sum payment to
finance debt consolidation. This secured method benefits consumers by
featuring tax-deductible interest.
- Cash-out refinance involves homeowners rolling their debts into their
mortgage. This process reduces interest rates on existing
debts, provides
consumers the convenience of paying debts with their mortgage and creates
an affordable option for debt consolidation.
Unsecured methods
- Low-interest credit cards or zero-introductory-rate cards offer
consumers a tool to fund debt consolidation whereby consumers transfer all
debts to one card and then make monthly payments on the lone credit card.
By paying a lower interest rate, consumers save money with this unsecured
method.
- Personal loans offer competitive interest rates for consumers who post
good credit. Debt consolidation with a personal loan benefits consumers by
reducing monthly payments and interest charges.
Author bio: Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Having worked his way through college and experiencing the transition to professional life, Brian understands how credit affects people’s lives. Learn more about
filing for bankruptcy and credit card debt from Brian through MyUSADebt. MyUSADebt is your alternative to debt consolidation.
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