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Best Way To Consolidate Debt

Do you feel as if you were drowning in a river of debt? Many Americans do. I saw one report recently that American families have an average of $19,000-plus dollars of debt. Think about that for a minute. The Census Bureau recently says that $46,326 is the median household income these days. Of course, median means an average value as indicated by the middle number of numbers in a series and many American families earn more than this. However, what this suggests is that the average debt of American families is nearly half the median income – which is why so many people are looking for the best way to consolidate debt.

Let’s look at the alternatives

While technically speaking, this may not be a way to consolidate debt, there is a way to manage debt by first paying off your credit card with the highest interest rate, then the card with the next highest rate and so forth. If you owe, say that $19,000 on four different cards with interest rates ranging from 18 %  to 12% , you could get yourself out of debt in about 3 years simply by first paying off the card with the 18 %  interest rate, then the one with a 16 %  interest rate and so forth

Zero balance credit card transfers

A second way to consolidate debt is to transfer all of your credit card debt to a new card that has a zero interest rate–at least for some period of time. If you can get a credit card with zero interest for 18 months you could save around $900 on $5000 of debt. Of course, at the end of their promotional, your interest rate could skyrocket to as high as 20% .

Secured debt consolidation loan

If you do owe $19,000 and an asset worth $19,000 or more you could get what’s called a secured debt consolidation loan. This means you would put up your asset as collateral on the loan and, in return, get a very good interest rate. There are homeowner line of credit loans and second mortgage loans available today with interest rates of less than 5 % . A second advantage of a debt consolidation loan is that you can stretch out your payments to five, seven or even 10 years. When you stretch out a loan for that many years, you should end up with a much lower monthly payment.

Unsecured debt consolidation loan

As an alternative to a secured loan, you might be able to get an unsecured loan where you don’t have to put up anything as collateral. As a general rule, an unsecured loan comes with a higher interest rate because the lender is taking more of a risk, as there is no asset it could seize. These loans can be good news for you because if you can’t make your payments, there’s nothing much the lender can do except turn it over to a collection agency. In comparison, with a secured loan the lender could actually force you to sell the asset you pledged as collateral, which would most likely be your house.

Debt relief

Many families have found the best way to consolidate debt is with what’s called debt relief or debt settlement. They hire a debt settlement company that negotiates with their credit card providers to settle the debt. In fact, a skilled debt relief company can usually settle credit card debts at $.50 on the dollar.

Debt relief can be the best way to consolidate debt for many families because it’s the only way to both reduce debt by 50% or 60% and get much lower monthly payments. National Debt Relief is a debt settlement company with many years of experience negotiating with credit card companies to get its customers very favorable settlements. You can learn more about this company at its website, http://www.nationaldebtrelief.com. Give National Debt Relief the opportunity to settle your credit card debt and you may agree that it’s the best way to consolidate debt.

By Paul Ritz
I am an associate at National Debt Relief, which is a Debt Consolidation Company that has helped thousands of Americans facing credit card debt problems. We help with debt settlement, debt management, and other debt related financial crisis' facing consum

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