Three Ways to Consolidate Debt

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Published On:
January 08, 2024

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With so many different types of debt and many payments during the month, you may be feeling some financial stress. One way to help make life easier, reduce stress, and save money is to consolidate your debt and turn your multiple monthly payments into one monthly payment while potentially saving money on interest. This post can help you find the best way to consolidate debt based on your individual needs and situation. Keep reading to learn more about three prominent debt consolidation options.

Credit Card Balance Transfer

A credit card balance transfer moves credit card debt from one or more high-interest credit cards to another low interest credit card. Often, credit card balance transfers have a promotional period with a lower interest rate on transferred balances to help you pay down your principle and pay off your debt quicker. Here at Arbor we offer 2.99% APR for 6 months* with no transfer fees. For those with high-interest credit card debt, this can help you save money on your interest charges, while keeping the same payment amount. It’s important to note, this type of debt consolidation will only allow you to combine your credit card debt.

If you are interested in learning more about how much you can save by transferring your balance, contact one of our consumer lenders today!

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Personal Loans

There are many reasons using a personal loan to consolidate debt may be the right option for you. One of the great benefits of using a personal loan to consolidate debt is that you can use it for anything. Some of these uses could include; any costly repairs you may need to make for your home or car, consolidating loan payments, and high-interest credit card payments. Using a personal loan to consolidate debt can help you pay off your debt faster if the interest rate of the loan is lower than the combined interest of the loans you are consolidating. In some cases, you may be able to shorten the life of your loans by choosing a shorter repayment term. 

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Home Equity Loans

If you are a homeowner with equity in your home, you can consolidate your debt using a home equity loan. Since you use the equity in your home as collateral for this type of loan, you can typically get a lower interest rate compared to other types of debt consolidation. Similar to a personal loan, you get a lump sum when you take out the loan and use that money to consolidate your debt into one easy payment. At Arbor Financial, we have two repayment terms, 10 and 15 years.

To learn more about how a Home Equity Loan can help you on your debt consolidation journey, speak with one of our Mortgage Loan Originators today.

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Consolidating debt is a great way to help take some of the stress off your shoulders by lowering your interest rate and making it so you only have one payment each month. "Members who consolidate debt are excited to take this step towards becoming debt fee and reducing their monthly stress. Having one payment verse multiple is often a huge relief, as well as saving money on interest." says Vice President of Consumer Lending Chris Jacobs.  Keep in mind consolidating your debt doesn’t address underlying financial problems like overspending. It is important to create and keep a budget that works for you in addition to consolidating your debt.

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* Annual Percentage Rate (APR). Offer available as of 4/6/23. Balance Transfer promotional rate applicable for 6 monthly billing cycles. Starting on the seventh month, the promotional rate will convert to your standard rate. Not eligible for CU Rewards Points and may not be used to pay other Arbor Financial accounts. Promotion, rate, terms and conditions subject to change without notice. 

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Financial Management Resources , Debt Management , Budgeting