West Virginia residents who want to consolidate their existing debts have several options to do so. Those who own a home may qualify for a home equity loan. However, a borrower typically needs to have a good credit score and sufficient equity to have a loan application approved. Individuals who have good credit scores and are trying to consolidate credit card debt may want to consider a balance transfer.
This allows a person to transfer existing balances from a card that has a high interest rate to one that has a lower rate. In some cases, borrowers may be able to avoid paying interest for several months after the transfer occurs. Personal loans may be available for those who have average or poor credit. Generally speaking, individuals with average or poor credit scores will pay a higher interest rate compared to those who have good or excellent credit.
As with a credit card balance transfer, a personal loan is typically unsecured. This means that a debtor won’t automatically lose an asset just because he or she wasn’t able to repay the balance on time. A home equity loan is considered to be a secured loan because the lender can repossess the borrower’s house if he or she fails to make payments on time.
Individuals may be able to use debt consolidation to obtain lower interest rates on credit card, auto loan or other balances. Combining outstanding balances into a single monthly payment may also reduce the chances of missed or late payments. Those who are being contacted by creditors regarding balances that are in arrears may want to contact an attorney. Legal counsel may be able to work out a new payment plan or obtain debt forgiveness from a lender on a debtor’s behalf.