Two Great Methods to Resolve Debt

Debt consolidation often occurs with either a secured loan or an unsecured loan to unite all debts. Consumers use the single consolidation loan to pay off multiple high-interest debts and then make monthly payments to one lender. Debt consolidation features many benefits for consumers to save money. The following list provides the two best types of secured and unsecured methods of debt consolidation:

Secured methods

1. Home-equity loans provide borrowers a one-time lump sum payment to finance debt consolidation. This secured method benefits consumers by featuring tax-deductible interest.
2. Cash-out refinance involves homeowners rolling their debts into their mortgage. This process reduces interest rates on existing debts, provides consumers the convenience of paying debts with their mortgage and creates an affordable option for debt consolidation.

Unsecured methods

1. Low-interest credit cards or zero-introductory-rate cards offer consumers a tool to fund debt consolidation whereby consumers transfer all debts to one card and then make monthly payments on the lone credit card. By paying a lower interest rate, consumers save money with this unsecured method.
2. Personal loans offer competitive interest rates for consumers who post good credit. Debt consolidation with a personal loan benefits consumers by reducing monthly payments and interest charges.

Author bio: Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Having worked his way through college and experiencing the transition to professional life, Brian understands how credit affects people’s lives. Learn more about filing for bankruptcy and credit card debt from Brian through Credit Solutions. Credit Solutions is your alternative to debt consolidation.

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