Consoladating credit

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.

If you do go for it, keep it as professional as possible.

There are dozens of ways to go about consolidating debt, and some include transferring the debt to a zero or low-interest credit card, taking out a debt consolidation loan, applying for a home equity loan or paying back your debt through a debt repayment consolidation plan.

When researching consolidation plan options, you may come across what’s known as debt consolidation companies.

Not only will you be bailing out your children at an important time in their lives, but you’ll also be giving them an excellent borrowing experience.

In the days of yore, when people needed a hand catching up on their bills, they strolled into the neighborhood bank, spoke to branch manager, shook hands on a loan, and got a check for the amount they needed.

There are several different types of consumer debt.

However, the most common debts are credit card debt, medical debt, and student loans.

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

If an offer sounds too good to be true, it probably is.

If you’ve built up some equity and interest rates seem favorable, it may make sense to refinance your home and use the additional cash you can borrow to pay off more expensive debts.

Or you might be better off taking out a home equity line of credit (HELOC) or a fixed-rate home equity loan.

Some of these debt consolidation companies are legitimate; according to the Consumer Financial Protection Bureau, however, others are incredibly risky.

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