Consolidating debt into one payment
By consolidating your credit card debt into a personal loan, you’ll have a definite plan for paying off your old card debt.
You may be able to consolidate your debt with a personal loan from your bank or credit union.
Not only does that simplify your debt payments, but it can also help you save money by making you pay only one interest rate, rather than several.
The best way to consolidate credit card debt — and whether consolidation will work for you at all — depends on your situation, so you might want to consult a non-profit credit counselor about your best options.
(Not every creditor has to participate, so you may be able to keep a credit card out of the debt management plan if you need it to remain open for travel or business purposes, for example.) Once you complete your plan, some of your creditors may re-establish your credit based on your new, debt-free status and the on-time payment history you established through the course of the debt management plan.
Be sure to check out any potential online lenders with the Better Business Bureau before applying for a debt consolidation loan online.
And you can verify if a lender is registered to do business in your state by contacting your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.
Whichever option you choose, you will use it to pay off your multiple balances.
Then you’ll only have one monthly payment: the loan, the credit card, or the debt management plan.
An error on any of your credit reports could prevent you from qualifying for the debt consolidation help you need, so You can get your free annual credit report from each of the three major credit reporting agencies — Trans Union, Equifax, and Experian.