Debt Consolidation Options for Non-Homeowners
Although a home equity loan is an ideal way to consolidate your debt and pay it off, it is not a viable option if you are not a homeowner.
You are not out of options if you do not own a home, as there are several debt consolidation options available for you as well.
Credit Card Balance Transfers - If you have a good credit rating, but you just want to get rid of some of that debt, then you may consider credit card balance transfers.
You can call your credit card companies and ask for a quote on the interest rate.
You are often able to get better transfer interest rates if you have good credit.
Here you will transfer all of your credit cards balances to the credit card with the lower interest rate and then begin paying that card off.
If you pay more than the minimum balance then you will be able to save on interest in the long run.
Secure The Loan With Other Valuables - If you have valuable items like your car, jewelry or even a boat, you can get a secured loan that will allow you to pay off your debts and then pay on the one secured loan.
If you use your valuables as collateral you should be able to get a larger loan amount and better interest rate because the loan is secured.
Borrow From Your Life Insurance Policy - Another option is to borrow from your life insurance policy or even your 401(k).
The loan amount will depend on how much your life insurance policy is worth.
If you choose to borrow from your 401(k), you need to be aware that you will have to pay about 10% in taxes and this amount will need to be figured in when you take out the money that you need.
The taxes will automatically be deducted and you will receive a check for the remainder.
Be leery of using debt settlement companies.
Some companies are scams, so be certain to look for not for profit companies that will help you negotiate with your creditors and help you to reduce your debts.
The bad thing about debt settlement companies is that you have to pay for their services as well and your credit rating may take a beating if the company waits for your bills to go into default.
You are not out of options if you do not own a home, as there are several debt consolidation options available for you as well.
Credit Card Balance Transfers - If you have a good credit rating, but you just want to get rid of some of that debt, then you may consider credit card balance transfers.
You can call your credit card companies and ask for a quote on the interest rate.
You are often able to get better transfer interest rates if you have good credit.
Here you will transfer all of your credit cards balances to the credit card with the lower interest rate and then begin paying that card off.
If you pay more than the minimum balance then you will be able to save on interest in the long run.
Secure The Loan With Other Valuables - If you have valuable items like your car, jewelry or even a boat, you can get a secured loan that will allow you to pay off your debts and then pay on the one secured loan.
If you use your valuables as collateral you should be able to get a larger loan amount and better interest rate because the loan is secured.
Borrow From Your Life Insurance Policy - Another option is to borrow from your life insurance policy or even your 401(k).
The loan amount will depend on how much your life insurance policy is worth.
If you choose to borrow from your 401(k), you need to be aware that you will have to pay about 10% in taxes and this amount will need to be figured in when you take out the money that you need.
The taxes will automatically be deducted and you will receive a check for the remainder.
Be leery of using debt settlement companies.
Some companies are scams, so be certain to look for not for profit companies that will help you negotiate with your creditors and help you to reduce your debts.
The bad thing about debt settlement companies is that you have to pay for their services as well and your credit rating may take a beating if the company waits for your bills to go into default.
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