Debt consolidating secured personal finance

Ideally, you offer your parents or another private lender an interest rate that’s better than what they’re getting at the savings bank.

A tip for Mom and Dad: If your kids ask you for a loan — for debt consolidation or any other purpose – even if you can easily afford the requested amount — take a good, hard look before you agree.

Try not to take the maximum amount of time possible to pay off your new loan, and come up with a plan to get out of debt in three to five years.

You’ll also want to read the fine print in order to avoid surprises such as a balance transfer fees or application fees.

The rates are better when the loan is secured, and you’ve been a bank customer for years than when the loan is unsecured and given solely against your good name. Remember, don’t hesitate to ask your bank or credit union to give you a better deal if they want to keep your business.

And be sure to discuss the situation with a lender before your credit report is pulled.

The following is more in-depth information on the different types of debt you can incur as well as options to consolidate this debt and come up with a debt management plan to achieve lower and more manageable payments.

Lenders know the competition is tough, and it’s cheaper for them to keep you than it is to get a new customer to replace you — especially if you’re a low-maintenance borrower who pays her bills on time.Or you might be better off taking out a home equity line of credit (HELOC) or a fixed-rate home equity loan.One of the easiest ways to consolidate your credit card debts is to call your current card issuers and ask for a better deal.The interest rates on these loans tend to be low — or even interest-free.For example, you can use money from your IRA interest-free for 60 days.

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