Debt management is an overwhelming concept for someone who is drowning in financial troubles. Moreover, it is necessary to know the correct way to consolidate your debt. The right way of debt consolidation, say, a balance transfer can help you maximize your savings and gain financial freedom as soon as possible.
From consolidating credit cards to loans, here are 5 proven ways that are proven to consolidate your debt.
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Consolidate your debt with the help of a low-interest credit card balance transfer
It might sound too generic to say that a low-interest credit card balance transfer can help you consolidate your debt. This is possible when you have a good credit score and have been a responsible customer. A good and responsible customer pays off bills on-time and never misses any EMI payments.
You can get low-interest credit card offers if you have a good credit score and excellent credit history. This way, you can balance transfer the high-interest credit card balances to a single card. And, save a lot more on interest repayments.
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Debt consolidation with the help of a personal loan balance transfer
A personal loan balance transfer helps in saving a lot on interest repayments. It is a viable option when you have big credit card bills. However, there are certain things you should do before you apply for an easy personal loan online or offline. Always do your research on what different banks offer in terms of interest. This helps you get a comparative analysis and find the right personal loan offer with best interest rates.
A personal loan balance transfer is possible if you have a good credit history.
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Taking a loan from your insurance policy
In India, the first name that pops into our mind in terms of life insurance plan is LIC. One of the interesting aspects of LIC policies is that you can take a loan against these insurance plans. As per the LIC norms, you can take a loan against LIC policies loan up to 90% of the Surrender Value (85% in case of paid-up policies) of the policy at the time of making an application.
The interest rates on loan against insurance policies are comparatively low. In fact, the loan disbursal is also quick as the loan is taken out of your own money. However, it is not a feasible option as if in a case you are not able to repay the loan, your survivors are not left with much.
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Go with a debt management plan
In a debt management plan, you will get the help of a debt expert who will create the plan as per your debts. You will be assigned a counselor who will create a new repayment plan that suits your financial situation. The counselor will also help present this to your current lenders. Once approved, you will be told an amount for your debts which needs to be sent to the counselor. They will then be responsible in terms of paying off the debt to different creditors.
While going for a debt management plan, it is always necessary to ensure you go to the right debt management company. Moreover, it is necessary to ensure the trust the company in helping you settle your debt.
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Debt consolidation with the help of retirement plans
We all consider our Provident Fund as our retirement plan. Which is why we never mind that big amount getting deducted from our salary every month. However, in times of financial trouble, you can get a loan against your PF. Since you are borrowing out of your own money, you don’t have to return it. This is one of the advantages of taking a loan against your Provident fund.
However, it is also necessary to note that the reason to take a loan should be genuine. A thorough verification process is carried before the PF loan is approved. Moreover, it should be the last resort when in financial troubles. Keeping your savings intact will always help you in the long run.
It is always advisable to check your free credit report online to assess whether you are eligible for these options. Moreover, taking the right step to consolidate your debt is essential for financial well-being.
