What Is Debt Consolidation? - Meditations on Money | Credit Karma

Debt consolidation is the process of taking multiple outstanding debts and combining them into a single debt, hopefully with a lower payment. Debt consolidation could be a way to get a handle on debt, but there are other ways too.

Here are four things to think about when you’re considering debt consolidation:

1. Before getting a loan or opening a card, consider reaching out to your creditors to see if they can work something out with you.

2. It might be helpful to talk to a certified financial planner or a certified credit counselor about your situation. An objective third party can help you figure out what makes the most sense for you.

3. Four common ways to consolidate debt include: a balance transfer credit card, a personal loan, a home equity loan and a home equity line of credit.

4. When you’re thinking about your options, consider interest rates, fees and whether you’re comfortable putting up your home as collateral (in the case of a home equity line of credit or home equity loan).
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