Published September 1, 2024

Simplify Your Debt: Explore The Best Loans for Debt Consolidation

Executive Vice President/Head of Marketing

What's in the Article

The top 7 loans for debt consolidation
1. Home equity loans and HELOCs
2. Unsecured personal loans
3. Credit card balance transfers
4. Secured loans
5. Payday loan consolidation
6. Federal student loan consolidation
7. Alternative loan types to consider
Choose a HELOC for debt consolidation from HomeEQ

Multiple debts can be overwhelming, with different due dates and interest rates complicating your finances.

Debt consolidation offers a more straightforward way to manage this by combining everything into one loan, potentially reducing your interest rates.

Home Equity Lines of Credit (HELOCs) stand out among the various options for debt consolidation.

A HELOC uses the equity in your home and provides flexible terms and lower rates, making it an ideal choice for those looking to tidy up their financial landscape.

This approach simplifies your monthly payments and aims to cut down overall debt costs effectively.

The top 7 loans for debt consolidation

You’ll find various loan types designed to fit different financial needs when considering ways to consolidate debt.

From accessible unsecured personal loans to credit card balance transfers with tempting introductory offers, secure loans that might require your car or savings as collateral.

The Home Equity Line of Credit (HELOC) is a standout choice.

HELOCs use the equity in your home to offer flexible and cost-effective financing.

This guide will walk you through each option and highlight why a HELOC from HomeEQ could be your best bet for regaining control over your finances.

1. Home equity loans and HELOCs

Home equity loans and HELOCs are secured by the borrower’s home and typically offer significantly lower interest rates than other forms of borrowing.

HELOCs, in particular, provide flexible access to funds and repayment options, much like a credit card, but with a borrowing limit based on home equity.

Access cash within days

Tap into your home’s potential in minutes. Start our streamlined digital application to discover if a HELOC is right for you.

2. Unsecured personal loans

Unsecured personal loans are a popular debt consolidation option because they do not require collateral, making them accessible to many borrowers.

The interest rates for these loans can vary significantly, generally ranging from 6% to 36%. This broad range reflects the lender’s risk in issuing loans without collateral and is heavily influenced by the borrower’s credit score and income.

3. Credit card balance transfers

Credit card balance transfers involve transferring debt from one or more credit cards to another with a lower introductory interest rate.

If the balance is paid off before the promotional period, which typically lasts 12 to 18 months, it can significantly reduce interest costs.

4. Secured loans

Secured loans, such as auto equity or savings-secured loans, offer lower interest rates because they are backed by collateral.

This makes them a less risky option for lenders and more affordable in terms of interest for borrowers—however, the risk of asset forfeiture if missed payments is a significant consideration.

5. Payday loan consolidation

Consolidation for outstanding payday loans is available. Payday loans are short-term, high-interest loans typically used to cover unexpected expenses between paychecks. 

Payday loan consolidation involves working with a lender to merge high-interest payday loan debts into a single, lower-interest loan, a personal loan, or another form of credit.

6. Federal student loan consolidation

For borrowers with multiple federal student loans, consolidation into a single Direct Consolidation Loan can simplify repayment.

While it won’t necessarily lower the interest rate, consolidation can make repayment easier and qualify the borrower for various repayment plans.

7. Alternative loan types to consider

Choose a HELOC for debt consolidation from HomeEQ

Considering different loan options for debt consolidation? Compare why a HomeEQ HELOC stands out with its lower interest rates and flexible repayment terms.

Learn more about how our fully digital HELOC application can simplify debt consolidation efforts and empower financial decisions.


Further Reading

Unlock your home’s potential

Access cash from your home within days. Try our streamlined digital application to discover if a HELOC is the key to your financial success. Get started to see your personalized offer.
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