Credit Card Debt Consolidation Loan
Options For Consolidating
Credit Card Credit Debt
If you're carrying credit card debt, a credit card debt
consolidation loan is one of two options open to you
for getting out of credit card debt.
The second is to consolidate the credit
card debt, using a 0% balance transfer credit
card to move the debt over to. But of the two options, which
is best for eliminating credit card debt problems!
To consolidate credit card debt using 0% interest credit
cards is perhaps more well-known due to the increasing popularity
of credit card credit. Credit card debt consolidation loans
however, also offer a good means of credit card debt management, especially if your credit card score rating
What Is A Credit Card Debt
Debt consolidation loans are low interest borrowings
you can obtain from a bank, financial lending institution or
from a credit card debt consolidation company. Because they
offer a means to carry out a low interest consolidation from a
high interest rate credit card debt, this type of loan
consolidation is not dis-similar to credit card debt consolidation using balance
transfer credit cards.
If you have a good credit card rating,
then debt consolidation loans are usually unsecured - meaning,
that you are not required to offer your home or any other
assets you hold, as security for the loan consolidation.
If however you happen to have a bad or poor credit history and you're looking to apply for a credit card debt
consolidating loan for the purpose of credit card debt
settlement, then you will have no option but to settle for
for a debt consolidation secured loan.
It is worth noting that the more dire your credit card rating
status, the harder it will be to secure a low interest
consolidation loan. This may apply equally to young people
without credit history and students, although there are
student loan debt consolidation services that deal with the
specifics of providing student loan debt consolidation for
With a debt consolidation secured loan, you will be
required to offer security, such as your mortgaged
home/owned outright or any other assets you own that has
a comparable value to the amount of the credit card debt
consolidating loan you want to secure.
You will also be required to make monthly repayments on
debt consolidation loans in accordance with the
terms and conditions of the agreement you sign with the bank,
credit card debt consolidation company or other lending
Your home or other assets will be at risk with debt
consolidation secured loans, So it is imperative that you
honour your repayment commitments.
Credit Card Debt
Consolidation Loan v Credit Card Debt Consolidation
As we have already established, debt consolidation loans are
low interest borrowings for the purpose of consolidating
credit card debts; whereas credit card debt consolidating
is the use of balance transfer credit cards to shift high
interest credit card debts to low interest credit cards.
In this respect, both debt consolidation loans and
credit card debt consolidation balance transfers are therefore
based on the same principle.
With the credit card debt consolidation balance transfer option,
you have the flexibility of the debt being in your control, which
means that not only do you have the option of repaying your
credit card debt in full at any time, you can increase your
repayments to get rid of the credit card debt more quickly
without incurring any 'early repayment penalties' as would be
the case with credit card debt consolidated loans.
In contrast, a drawback to consolidating credit card debts, using
a credit card debt consolidation loan is that it will take
far longer to repay the debt in full. This longer repayment
period means you will incur more in interest charges. Credit
card debt consolidation loans must also be repaid in
monthly installments in accordance with the terms of the
consolidation loans agreement between you and the credit card
debt consolidation loan company.
There are many a cheap debt consolidation loan being
advertised. However, head-to-head, the cheapest credit cards
will undercut by far the most cheap debt consolidation loan on the
market. Balance transfer credit cards therefore compare more
favourable over the best debt consolidation loan if you want to
consolidate credit card bills more cheaply.
As you can see, both credit card debt consolidation loans and
balance transfer credit card debt consolidation aim to achieve
the same objective for you. While some people might naturally
prefer to consolidate credit card bills using balance transfer
credit cards, others will favour getting the best debt
consolidation loan. It is perhaps the comfort of knowing
that credit card accounts have been closed and temptation has
been taken away that hold the most appeal.
They can also look forward to making one affordable monthly
payment instead of worrying about the inconvenience of repaying
several credit card bills.
Choosing between a credit card debt consolidation loan and a
balance transfer to consolidate credit card debt is therefore
down to personal choice.
The content on this site is purely for information purposes only
and is not intended to replace your seeking professional financial
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