 
|
New Loans to Consolidate DebtNew loans to consolidate debt may involve a loan backed by your retirement fund. Debt consolidation with a retirement fund loan, often a 401(k) loan, enables you to unite all of credit card debt into a single large loan with only one monthly installment. Consumers can find debt consolidation loans in different places. Their bank or credit union can give them a personal loan for debt consolidation or consumers can borrow against their home equity for debt consolidation. Consumers can even borrow against their whole life insurance to consolidate their debt, though their beneficiaries will receive less if the consumer dies before paying back the loan. A safer method of debt consolidation is borrowing against one's retirement funds. Consumers with money invested in their company's 401(k) can borrow up to 50 percent or $50,000 of their balance. The biggest benefit of this is that the interest they pay on their loan goes into their retirement fund, not to a lender. The risk of debt consolidation with retirement funds is that they lose their retirement fund if the consumer defaults. Also, their employer could demand repayment in full if the consumer is fired. Another risk is that the consumer must report it on their taxes if it is not repaid within a certain time frame. Despite these risks, debt consolidation with retirement funds is an attractive option for many consumers. Author Bio: Scott Sumerford has several years of experience working in the financial industry and has written a myriad of articles on various financial matters. He graduated from the University of Texas at Arlington where he worked as a writing center tutor and contributed to the university's newspaper, The Shorthorn. Read more about how Credit Solutions offers viable alternatives to debt consolidation.
|
 |
|||
