Credit Card Debt Consolidation Loan
Options For Consolidating
Credit Card Credit Debt
If you're carrying credit card debt, a credit card debt consolidation loan is one of two options open to you
for getting out of credit card debt.
The second is to consolidate the credit card debt, using a 0% balance transfer credit card to move the debt over to. But of the two options, which
is best for eliminating credit card debt problems!
To consolidate credit card debt using 0% interest credit
cards is perhaps more well-known due to the increasing popularity of credit card credit. Credit card debt consolidation loans
however, also offer a good means of credit card debt management, especially if your credit card score rating is poor.
What Is A Credit Card Debt Consolidation Loan
Debt consolidation loans are low interest borrowings
you can obtain from a bank, financial lending institution or from a credit card debt consolidation company. Because they offer a means to carry out a low interest consolidation from a high interest rate credit card debt, this type of loan consolidation is not dis-similar to credit card debt consolidation using balance transfer credit cards.
If you have a good credit card rating,
then debt consolidation loans are usually unsecured - meaning, that you are not required to offer your home or any other assets you hold, as security for the loan consolidation.
If however you happen to have a bad or poor credit history and you're looking to apply for a credit card debt
consolidating loan for the purpose of credit card debt settlement, then you will have no option but to settle for
for a debt consolidation secured loan.
It is worth noting that the more dire your credit card rating status, the harder it will be to secure a low interest consolidation loan. This may apply equally to young people without credit history and students, although there are student loan debt consolidation services that deal with the specifics of providing student loan debt consolidation for this group.
With a debt consolidation secured loan, you will be required to offer security, such as your mortgaged
home/owned outright or any other assets you own that has
a comparable value to the amount of the credit card debt consolidating loan you want to secure.
You will also be required to make monthly repayments on debt consolidation loans in accordance with the terms and conditions of the agreement you sign with the bank, credit card debt consolidation company or other lending institution.
Your home or other assets will be at risk with debt consolidation secured loans, So it is imperative that you honour your repayment commitments.
Credit Card Debt Consolidation Loan v Credit Card Debt Consolidation
As we have already established, debt consolidation loans are low interest borrowings for the purpose of consolidating credit card debts; whereas credit card debt consolidating is the use of balance transfer credit cards to shift high interest credit card debts to low interest credit cards.
In this respect, both debt consolidation loans and credit card debt consolidation balance transfers are therefore based on the same principle.
With the credit card debt consolidation balance transfer option, you have the flexibility of the debt being in your control, which means that not only do you have the option of repaying your credit card debt in full at any time, you can increase your repayments to get rid of the credit card debt more quickly without incurring any 'early repayment penalties' as would be the case with credit card debt consolidated loans.
In contrast, a drawback to consolidating credit card debts, using a credit card debt consolidation loan is that it will take far longer to repay the debt in full. This longer repayment period means you will incur more in interest charges. Credit card debt consolidation loans must also be repaid in monthly installments in accordance with the terms of the consolidation loans agreement between you and the credit card debt consolidation loan company.
There are many a cheap debt consolidation loan being advertised. However, head-to-head, the cheapest credit cards will undercut by far the most cheap debt consolidation loan on the market. Balance transfer credit cards therefore compare more favourable over the best debt consolidation loan if you want to consolidate credit card bills more cheaply.
As you can see, both credit card debt consolidation loans and
balance transfer credit card debt consolidation aim to achieve
the same objective for you. While some people might naturally prefer to consolidate credit card bills using balance transfer credit cards, others will favour getting the best debt consolidation loan. It is perhaps the comfort of knowing that credit card accounts have been closed and temptation has been taken away that hold the most appeal.
They can also look forward to making one affordable monthly payment instead of worrying about the inconvenience of repaying several credit card bills.
Choosing between a credit card debt consolidation loan and a balance transfer to consolidate credit card debt is therefore down to personal choice.
The content on this site is purely for information purposes only and is not intended to replace your seeking professional financial advice.
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