- 1). Take a look at your existing credit cards. Review the interest rates and available credit for all of your active credit cards. Make a list of each card with the current amount of debt and the interest rate. The easiest way to save money and consolidate debt is to transfer the balance of several credit cards that have a high interest rate to a higher credit limit card with a lower interest rate. The amount owed will go down and only one payment will be due each month. Make sure to consider the balance transfer fee into the evaluation.
- 2). Find out if personal loans are available from your employer or credit union. If you are working then you have some financial clout. Credit unions sometimes offer personal loans even for those with bad credit if a direct payment is set up out of your paycheck. Look for this type of option for a low interest loan you can use to pay back higher interest credit cards.
- 3). Use the equity in your home to take out a loan to pay back high interest credit cards. Having equity is more of a rarity these days because of the sinking housing market, but if you qualify then you will be able to significantly lower your monthly payment since home equity loans can be taken out for up to 30 years.
- 4). Borrow against a car you own. That is right, banks and credit unions will loan money to people who own their cars. A percentage of the value of the car can be borrowed, just like you are buying the car from a dealer. The interest rate for this type of loan is typically based on the model year of the car. The bank will need to appraise the vehicle and verify ownership before approving the loan.
- 5). Apply for a debt consolidation loan. This type of loan consolidates all of your debt payments into one payment. It is more difficult to get a debt consolidation loan at a low interest rate if you have bad credit, but it is possible depending on your financial circumstances. Make sure the loan consolidation company is legit before providing them with any personal information. Check with the Better Business Bureau and be sure they are registered as a state certified bank through your state auditor's office.
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