Secured Credit Card

Have you fallen behind on your credit card payments? Do you have a low credit score? If you do then debt consolidation is probably not for you. Right? Try again. It is possible to consolidate your credit card debt even if you have bad credit or a horrible credit score. Learn what you need to know about consolidating your debt.

Two of the more popular ways to consolidate your bills are using a home equity loan or a balance transfer offer. But if you have bad credit it will be very difficult to qualify for a low rate loan or low rate credit card. It would not make much financial sense to transfer your balances with an 18% APR to a new card with a 25% APR for example.

So what are you to do? You want to pay off your bills but your credit history prevents you from doing so. Which makes it harder to get out of debt and increase your credit score and build good credit. It’s a catch 22.

There are several companies that offer debt management plans which can consolidate all your debts into one low monthly payment regardless of your credit history. How so you ask? First of all they do not lend you money or do not provide a debt consolidation loan to accomplish this.

What they do is work out agreements with all your creditors to spread out your payments over time and lower your interest rates and waive late fees and stop harassing you with phone calls at all hours of the day.

Instead of you making individual payments to all your creditors, you make one monthly payment to the debt consolidation company and they in turn send it out to all your creditors to satisfy your debts. This is how you consolidate all your credit card debt even if you have bad credit or a very low credit score.

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Debt can be a huge burden on our lives and our finances. If you have found yourself caught up in the vicious circle of high interest credit card debt, an Iowa home equity loan may be just what you need to get a fresh start.

Low Interest

The biggest benefit to getting an Iowa home equity loan to pay off debts involves interest. The interest rate you pay on credit cards is usually high and often times, downright unreasonable. This is why it is so hard to dig yourself out of a hole. With a home equity loan, you can dump your high interest and trade it in for a much better rate. You can also deduct the interest payments that you make on a home equity loan–something you can’t do with credit card interest. Currently, rates on Iowa home equity loans average 7.66 percent.

Pay Your Debts Off Faster

A low interest Iowa home equity loan will allow you to pay your debts off faster. It will also prove to be much more convenient, because you can consolidate all of your monthly bills into one low monthly payment. With a home equity loan, you could easily save yourself thousands of dollars over a period of a few years.

The Risk Factor

There is a small amount of risk associated with using home equity loans to consolidate debt. You will be trading in unsecured debt for secured debt. This means that if you miss the payment, you will have more than bad credit, you could lose your home. Before taking out an Iowa home equity loan, you should be very confident in your ability to make the loan payments.

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