What Is The Fastest Way To Credit Debt Elimination?
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As a homeowner you could take out a new home equity loan or HELOC (home equity line of credit) and use the funds to pay off existing consumer credit debts (credit cards etc.) You could also consider refinancing your existing mortgage, taking out some extra cash and using that extra cash to pay off your debts.
Aside: Even if you have very little or no equity in your home or even if your credit is very poor, you can still qualify for a home equity loan, HELOC, or mortgage refinance. So don't automatically rule out this option even if you think you won't, or can't qualify for a loan.
The benefit using a debt consolidation loan to achieve credit debt elimination is twofold.
First, the interest rate on a home equity loan will almost certainly be much lower than the interest rates on your credit cards. Credit card interest rates will likely be around 20% or more, while the interest rate on your new home loan could be half that or less. If this is the case then the interest that you pay will also be cut in half.
The second benefit has to to with tax deductibility.
The interest paid on mortgages or loans secured by your home is tax deductible. Now, not only will you be paying half the interest, it will be tax deductible.
One thing you should be aware of though. If you borrow more than your home is worth the interest that you pay on the amount of your loans that exceed the value of your home is not tax deductible.
If you are interested in getting a free quote on a home loan to help consolidate your debts, click here to visit a company that will help you get up to for different lenders bidding on your loan, thus ensuring the best deal for you.
2. Non Profit Credit Counseling
Credit counseling or debt consolidation as it is also known is probably the most recommended credit debt elimination option for the average consumer who is in debt.
A credit consolidation company will consolidate your debts so that you are only required to make one payment each month. Instead of paying all of your creditors, you simply make one payment to the credit counselor each month and they in turn pay your creditors.
In addition to this service, a good non-profit debt consolidation company will negotiate interest rate reductions with your creditors. These reductions are usually around 50%, but can sometimes be as high as 100%, leaving only the principal to repay.
And finally, your monthly payments will usually be reduced to a manageable amount that will fit your budget.
When it comes to recommending a credit counselor (debt consolidation company) to our visitors, we usually send them to either of the following two companies. They are both excellent companies and offer free debt plans and analysis with no obligation on your part. Feel free to use their services. (In fact you may want to visit both and get two different perspectives on your situation from two separate debt experts. Remember the plan/analysis is free)...
A more detailed explanation of non-profit debt consolidation can be found here (non-profit debt consolidation).
3. Debt Reduction/Settlement
Unlike credit counseling and debt consolidation loans, which are aimed at reducing the interest charges you pay, debt reduction (also called debt settlement or debt negotiation) aims to reduce the debt itself and settle with your creditors with a lump sum payment.
Often times a good debt settlement company can reduce the debt you pay by 40 to 50%. In other words if you owed $10,000, a debt reduction company can get that amount reduced to $5,000 to $6,000 plus get rid of any interest.
Typically with this type of credit debt elimination program the debt reduction company is paid a percentage of the amount of money that they save you in the end.
Our advice is that you avoid companies that charge you an upfront fee and/or a monthly ongoing fee. Only pay for performance.
If one of our visitors is considering debt settlement, then nine times out of ten we will recommend that they visit
curadebt's website. Not only will they provide you with a no obligation debt analysis and plan, they will use this analysis to make sure that you get into the program that best suits you visit them here if you like.For a more detailed discussion on debt settlement as a credit debt elimination option click here (100% debt elimination)
4. Keep Doing What You Are Doing Now...
This is not really a credit debt elimination option as I am sure you are aware. Continuing to just make minimum payments on your credit cards is financial suicide and will lead you to bankruptcy.
5. Do It Yourself Debt Elimination
If you are interested in learning more about this credit debt elimination option click here (debt elimination plan)
6. Bankruptcy
Although bankruptcy may seem like a good option, or your only option it should only be a last resort. Filing for bankruptcy will ruin your credit for 10 years and will likely cost you over a thousand dollars just to complete the process.
My advice is to consider debt settlement (option #3) before you consider bankruptcy.
Regardless of the credit debt elimination option that you choose, you must take action immediately. The sooner you put your chosen credit debt elimination option into action the sooner you will start to enjoy some peace of mind, and start getting rid of that debt.