How to Successfully Consolidate Credit Card Debt

If you are struggling with credit card debt, there are three methods of consolidation that you may consider. By consolidating or emerging your debts into one account, you can concentrate on your repayment obligations with much less burden.

In this article, let us take a closer look at how credit card debts can be consolidated:

HELOC or Home Equity Loan. One option is apply for a Home Equity Loan. The amount of funds you can get will be directly dependent on the value or an equity of your home. This type of loan is different from other loans because it allows the borrower to choose flexible borrowing terms.

Thus, instead of receiving a lump sum loan from your lender, you may choose to take out the funds in instalment basis. That means you can borrow any amount within your borrowing period as long as you the value does not exceed your Home’s Equity. After the borrowing period, that’s the time when your repayment period starts.

Debt Consolidation Loan. Banks, credit unions and commercial lending companies offer different types of personal loans for debt consolidation. Once approved, the proposed amount of loan will be released to the borrower which can be used to pay off all existing debts from different creditors.

Afterwards, the borrower will be subjected to the debt consolidation lender’s repayment Terms and Conditions. Usually, loans for debt consolidation is a secured type of loan because it in most cases, it involves a huge sum of money. By asking for collateral, the lender can have assurance that funds will be available in case the borrower fails or defaults with the repayment.

What about borrowers who do not have any property to submit as collateral? There are also lenders who offer unsecured debt consolidation loans although the amount may be limited to a smaller value and the repayment period may be shorter as well.

Balance Transfer Credit Card. Finally, debts can be consolidated by getting a new credit card with zero percent interest rate. By not paying additional interest, the cardholder can focus on paying only the original amount of deficit he/she owed.

The thing about balance transfer cards is that the 0% APR is just a temporary offer. Most cards offer zero interest for a minimum of 6 months to 12 months. Before signing up for a balance transfer card, it is very important to make sure that you can complete your payments while the zero rate still applies. It is also essential to check what the regular rate would be when the introductory period expires. Otherwise, you could get stuck with a credit card that has an even higher rate than your old credit cards.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010


  1. Charlie Kimball

    The benefit of a reputable credit repair company is that they know the is in and out of getting credit blemishes removed like deciding to do your own taxes or to hire an accountant sometimes you need professional credit repair help.

  2. physical therapist

    What a great resource!

  3. Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

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