Credit card debt for Florida consumers and others throughout the country is at its highest level in almost 10 years. While many cardholders are carrying higher balances, interest payments are steadily increasing. It is difficult for some to get out of the seemingly unending cycle of trying to pay down balances and get out of debt. Financial experts suggest that debt consolidation may be a valid option for some consumers.
Debt consolidation is a way to bring all credit debt card together. By refinancing all the debt, it eliminates the need to pay multiple credit card companies, since only one monthly payment is necessary. In many cases, the rate on the refinanced loan is lower than those for the credit cards.
Consumers must choose between a secured or unsecured debt consolidation. Collateral, such as a car or residence, is required for a secured loan. If someone misses a payment on a secured loan, the asset offered as collateral is at risk. Experts recommend getting an unsecured debt consolidation loan if possible for this reason.
A personal loan may be obtained for debt consolidation and can be used to pay student loans, medical bills or credit card debt. Others may choose to consolidate multiple credit cards by transferring the balances to a zero interest card. Some consumers may apply for a home equity line of credit. However, this may be risky since a home would be used as collateral.
There are many options available to consumers to help them get credit card and other debt under control. To determine if debt consolidation is the right answer, it would be advisable to seek the assistance of a Florida bankruptcy lawyer. An experienced attorney can help clients understand the different paths forward and develop plans to most effectively meet their needs.
Source: mountainhomenews.com, “Blog: What Is Debt Consolidation and Should You Consolidate?”, Adam Richards, Oct. 11, 2017