Category: Alternatives to Consolidation
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Should You Borrow From Your 401(k) to Pay Off Debt?
Key Takeaways When credit card interest is eating your budget, the money sitting in your 401(k) can look like an easy solution. A 401(k) loan offers a low rate, no credit check, and interest you pay back to yourself. But…
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Home Equity Loan vs. Debt Consolidation: Which Makes More Sense?
Key Takeaways If you own a home, you may be weighing two ways to consolidate debt: a home equity loan (or HELOC) or an unsecured debt consolidation loan. The home equity option usually offers a lower rate. The unsecured loan…
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Borrowing From Family to Pay Off Debt: Pros, Cons, and How to Do It Right
Key Takeaways Borrowing from a parent, sibling, or friend to pay off high-interest debt can save a lot of money — no credit check, often little or no interest, and flexible terms. But money between loved ones can strain relationships…
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The Debt Snowball vs. Debt Avalanche Method Explained
Key Takeaways Once you commit to paying off debt, the next question is which debt to pay first. The debt snowball and debt avalanche are the two most popular strategies. Both work. The best one is the one you’ll actually…
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Should You File Bankruptcy Instead of Consolidating?
Key Takeaways Bankruptcy carries a heavy stigma, so many people try every other form of debt relief first — sometimes spending years and thousands of dollars on programs that don’t work. For some situations, bankruptcy is actually the faster, safer,…
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Can You Negotiate Directly With Your Credit Card Company?
Key Takeaways Before paying a company to negotiate on your behalf, it’s worth knowing that you can often negotiate with your creditors yourself — for free. Card issuers have hardship programs and settlement policies they don’t advertise. A well-prepared phone…
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Is a Cash-Out Refinance a Good Way to Pay Off Debt?
Key Takeaways A cash-out refinance replaces your current mortgage with a new, larger one and gives you the difference in cash. Homeowners sometimes use that cash to pay off high-interest credit cards. It can lower your interest costs — but…
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When Debt Consolidation Is the Wrong Choice
Key Takeaways Debt consolidation is often presented as the obvious answer to credit card debt. But it isn’t right for everyone. In some situations, it delays the inevitable, costs more than it saves, or creates new risks. Here are the…
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How to Spot a Debt Relief Scam Before You Sign Anything
Key Takeaways When you’re stressed about debt, a promise of fast relief is hard to resist — and scammers know it. Debt relief scams can take your money, leave your debts unpaid, and damage your credit further. The good news…