Consolidating credit card debt into line of credit
To find an accredited credit counseling agency, contact the National Foundation for Credit Counseling or the Financial Counseling Association of America.
Yet another way to consolidate your debt is by asking a friend or family member for a loan.
The repayment time frame is between three to five years.
Many credit card issuers reduce interest rates for consumers on the plan (and some waive them entirely).
According to IRS rules, you may borrow a maximum of 50% of your vested balance or ,000, whichever is less, and have up to five years to repay. You do have to be sure of your job’s stability, though, because if you quit or are fired, the entire balance would be due within 60 days.
You send one fixed payment a month to them, and it disperses the funds to your creditors.
But before you say, “sign me up,” get to know the different methods of debt consolidation, and how they may — or may not — help you with your financial and credit goals.
The idea behind a consolidation loan is to borrow enough to cover the balances on your credit cards.
Review this option with your human resources department and a qualified financial planner.
Nonprofit credit counseling agencies provide stressed-out debtors with another form of debt consolidation.