It is certainly not the end of the world if you don’t own a home, there are still other solutions for non homeowner who wants to consolidate his debts.

Credit Card Balance Transfer

If you have a good credit rating, this solution is suitable for you. You can call your existing credit card companies and ask for an interest rate quote if you transfer your other card balances to them. If your current credit standing is good, you should be able to get better interest rates and terms to consolidate your debts.

Be sure to ask for a fixed interest rate and to waive any transfer fees if any. You should also compare the rates of all the credit card companies before you commit to any one of them. Choose the one which you are most comfortable with.

In some instances, credit card companies offer balance transfers with six months of zero interest. Thus, every monthly payment for six months will go towards reducing the balance. However, if you have a skipped or late payment, the credit card company will begin charging interest before the introductory period has expired.

Before opening a new account, check to see that you can transfer balances from your current cards to the new one. If both new and old accounts are with the same financing company, your creditor may not allow a transfer. Also, read on jumps in interest rates after the introductory period.

Withdrawal from Insurance Policy

What are insurance policies for? It’s to help you in time of crisis. If you have bought life insurance policies years ago, it’s the time to borrow from your policy. Loan amount is dependable on your policy and of course the worth of your policy.

Personal Loans

You can also decide to use a personal loan for debt consolidation and reduction. With interest rates typically lower than credit card rates, you can reduce your payments by hundreds. One payment also makes it easier to pay than several small bills.

With an unsecured personal loan, you will need to have decent credit and steady income. Once you pay off your other debts, you can decide to leave those accounts open for emergencies or close them.

Before you pay off all your bills with a personal loan, make sure you have researched several lenders to find the lowest rate. Also be sure that you find a rate lower than what you are currently paying on your bills. Personal loans are usually prime plus 2% to 5% higher.

Personal Debt Consolidation Loans from Credit Unions and Banks

Individuals with a high credit rating may be able to obtain a personal debt consolidation loan through their bank or credit union. Credit unions are better because they offer lower rates. Each bank has different lending requirements. In some cases, you may be able to obtain a no-collateral loan. This generally requires a high credit score and income.

If you do not have good credit, a credit union or bank may approve your loan request if you have collateral. Collateral includes any piece of property of adequate value. In some instances, applicants offer financial institutions vehicle titles.

Secured Personal Loan

If you have valuable items like car, jewelry and even electronic goods, you can try to get a secured personal loan at your local bank or financial institution. Using your valuables as collateral for your loan, you can get a measurable amount of loan depending on the market vale of your collateral.

This option is most feasible if you own valuable properties because your loan amount is dependable on your collateral.

Get Approved for a Secured Personal Loan

Banks regularly offer debt consolidation loans If you do not own a home, it may be possible to get approved for a personal loan using some sort of collateral. Collateral is used as security for the loan. Thus, if you fail to repay the lender, they have the power to claim your item. Collateral can consist of any valuable piece of property (electronics, jewelry, vehicle title, etc.)

Getting Better Rates

Interest rates can vary as much as 10 points on personal loans and the same with credit cards. Comparing financing offers will ensure that you get the best deal on consolidation your loans, enabling you to save even more money.

The quickest way to research rates is to look online. Individual lenders will post their rates. Sometimes you will have to search the site, but often rates are on their homepage.

For personal loans, you can also work with a broker site. They will provide you with quotes from several different companies.

To get the most out of your debt consolidation loan, pay off your loans as soon as you receive the money. Then close accounts to keep out of debt and improve your credit score. Finally, focus on paying off your debt consolidation loan by making extra payments. Not only will you save on interest charges, but you will be out of debt sooner.

Debt Settlement Companies

With the help of a third party, they can help you negotiate with your creditors to reduce your debts by up to 50-70%. The downside is that you will have to pay for their services and there are many scams out there.

Be careful to check out on their fee structures and if there are any hidden fees involved in the course of settlement. You can also check out the reputation of the company with your local Consumer Affairs or the Better Business Bureau website.

Non-Profit Debt Consolidation Agency

Debt consolidation agencies are perfect for non-homeowners. These agencies are very useful because they have the ability to negotiate better interest rates and convince creditors to waive late fees and over-the-limit fees.

Once the negotiations have concluded, debt management agencies combine debts. Each month, payments are submitted to the agency. Debt consolidation or management agencies do not payoff debts, they manage the payments. To avoid paying a monthly or one-time service fee, choose a non-profit debt consolidation service.

Because of the variety of debt consolidation agencies, it is wise to request online quotes before selecting a company. Quotes entail a representative from the agency reviewing your debts, and remitting estimated monthly payments and estimated payoff time. Be aware that agencies have specific requirements. Some debt consolidation agencies will not offer help to people who are able to manage their own debts. Thus, qualified applicants must have a large debt amount, and accounts that are at least 30 days past due.

Non-Profit Consumer Debt Management Programs

If you have exhausted all options for consolidating your debts, contact a non-profit debt management service. Some consumers attempt to negotiate better rates with their creditors. Unfortunately, many do not receive favorable results. Debt management programs can successfully convince creditors to waive late fees, reduce interest, etc. Because these programs are reputable, and the representatives have clout, creditors are more apt to accept negotiated terms.

By Carrie Reeder, Moses Wright & L. Sampson

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