Consolidating bills and working to consolidate debt can be a great way to manage your debt. If you consolidate your bills, you may be able to:
Your current credit rating has a lot to do with the options available to consolidate your bills. It is also important for you to think about how each bill consolidation option affects your credit.
If your credit rating is excellent and your income strong, you have a few good options, none of which harm your credit.
Refinance to Consolidate Bills: If you are a homeowner with equity, you should look into a cash-out refinance. If you qualify to refinance your mortgage and consolidate all of your bills, you get the benefit of a tax deduction, in addition to a low interest rate and smaller over all payment. You can get a free mortgage quote from one of Bills.coms pre-screened lenders.
Balance Transfer to Consolidate Bills: While 0% balance transfer offers are not as plentiful as they were a few years back, there are still some excellent opportunities to consolidate bills through a balance transfer. Pay close attention to the associated fees and also to when your introductory interest rate will expire and how high it can go.
Unsecured Loan to Consolidate Bills: It may be possible to consolidate bills with an unsecured loan, but that has become more difficult in the past few years. Some lenders have stopped unsecured loans altogether. Those that offer them, tend to offer them at a high interest rate. If you're not reducing your interest rate on the bills you consolidate, it probably does not make sense to consolidate bills only for the ease of making one monthly payment.
Your bill consolidation options are far different if your don't have strong credit and your debt-to-income ratio is low. While a consolidation refinance or a balance transfer completely pay off your current lenders and creditors, the following options do not. These options for consolidating debt with bad credit do reduce your monthly payment and allow you to make only one payment each month, but your debts do not get paid off up-front. Your debts get paid off during the programs.
Goals: Your goals for consolidating your bills play a big part in making the best consolidation choice. Prioritize what is most important to you. For instance, if getting out debt as quickly as you can and at the lowest cost is more important to you than how your credit is affected, focus on debt settlement. If your credit score is most important or you want to stop creditors from calling you, credit counseling is a better choice.
Shop around: If you speak with only one company or with different companies that offer the same approach to getting you out of debt, you might just get sold the wrong solution for your debt needs.
Be cautious: Check out any firm before you hire them. Read about how to avoid falling for a rip-off bill consolidation firm.