If you have any outstanding payments at the end of the month for cards, you can resort to debt consolidation. We tell you how to consolidate card debts.
Credit cards are very useful financial products to make purchases and obtain cash without the need to have it in the bank account at the time of payment or withdrawal. However, if you have more than one card, you may see your daily economy affected by the debts they generate. If you want to know how to consolidate credit card debts, keep reading this post.
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Now that you know what credit redemption is, it is time to browse around these guys and consolidate credit card debts. There is no single way to consolidate credit card debts if not, there are different alternatives that you can access to unify all payments in a single amount and a single loan:
1. Personal consolidation loan:
One of the most common alternatives used by Argentines to consolidate credit card debts is to opt for a consolidation loan with a financial entity.
It is a personal loan in which it is possible to group all debts either by credit cards or other types of credits. The amount to be requested for this new personal loan will be the total amount for all outstanding debts, and thus you will only have to pay the monthly installment of this new loan in which all your debts will be unified.
Knowing how to consolidate card debts through a personal loan is easy since you will only have to apply for the loan with a financial entity and once it is granted you will only have to worry about paying a monthly payment.
The operation is the same as with a conventional personal loan, the entity lends you the amount you need (all of your debts) and you pay back in monthly installments the amount borrowed plus interest on the credit during the agreed repayment period.
2. Home equity loans:
If you are very indebted or appear in the Veraz and have difficulty accessing a personal loan without guarantee to consolidate credit card debts, you can choose to apply for a loan with a housing guarantee, that is, to perform a debt consolidation with housing guarantee.
In this case, you need to provide the guarantee of a home free of economic charges and that will be your property. Through this guarantee or payment guarantee, financial institutions will have more confidence in your solvency and may grant you a consolidation of debts that you must pay through monthly payments for the entire term agreed with the entity.
A point in favor of consolidation through home equity loans is that they tend to have a lower interest rate than conventional loans since entities have the guarantee of a property.
The property is the guarantee of payment for consolidating credit card debts, and in case of non-payment in the monthly payments you could lose it, so you have to consider this option very well before requesting it.
3. Credit card balance transfers:
Many credit card entities offer the possibility of making balance transfers to a single credit card with a zero percent interest or with really low interest.
In this way, you would have different cards with different balances and therefore different monthly installments to face a single card with a single balance (sum of all your cards) and a single monthly payment.
Although it is a very good option, it is recommended that if you request the balance transfer do not make purchases during a period with that card, that way it will be easier to pay the debt and not accumulate pending payments.
What is debt consolidation?
It is possible to group all payments for different personal debts through debt consolidation.
It is a financial product or service that allows you to obtain financing to cancel all your outstanding debts. Therefore, it is possible to consolidate credit card debts and merge them into a single monthly payment and a single loan or card, achieving greater comfort by being able to pay them all in a single payment.
Thus, you will have to pay different monthly fees for the cards to have a single fee with which you can pay them all at once. In addition, in these cases, it is possible to extend the repayment term of the loan, so the monthly payment you have to pay will be as comfortable as possible, although you will be paying more time for interest.
You should not forget that although you choose to consolidate credit card debts and have a single monthly payment for all of them, the payment obligation is pending and you must face the consolidation fee responsibly, avoiding falling into an over-indebtedness and ending reported in the Truthful Report.
Advantages of consolidating credit card debts:
After knowing how to consolidate card debts and the different alternatives to which you can opt, it is advisable to know what are the advantages that this financial service will have to request:
✔ Pay all your debts through a single monthly fee, allowing greater tranquility and comfort of your daily economy
✔ Reduction of the interest rate, since it is possible to compare between different entities and consolidation products and choose the one with the best conditions
✔ Improve financial management and not fall into an over-indebtedness
✔ You will know how much you will always have to pay and you will not have a feeling of uncertainty
Tips on how to consolidate card debts:
In addition to knowing the different alternatives you have to consolidate credit card debts, it is important that you also know some tips and some factors that you should consider before requesting consolidation:
Compare between different banks and financial products. If you compare the different options you can choose the one that best conditions to consolidate card debts.
Prepare a family budget and know your income and expenses. It is not enough to request consolidation to cancel your debts comfortably, it is important that you are clear about your financial options and that you adjust a family budget to control expenses and avoid having more debts.
Now that you know how to consolidate credit card debts, it is important that you know that the most convenient thing is to never have to reach this situation. Do not request more cards than you need, and whenever you have to apply for a banking product, such as cards, loans or mortgages, it is important that you know your financial and payment capacity well so as not to fall into a severe over-indebtedness.