Financial Help: Five Sources of Debt Consolidation Funds (cont.)
Contributed by Deb Powers
Borrow from your retirement fund to help consolidate your debts.
Many employers allow you to withdraw funds from your 401(k) retirement plan early. Because the interest is almost never tax deductible, though, and there are penalties and fees associated with early withdrawal, this should be a last-ditch effort. In addition, if you leave your current employer, they may call the entire loan due immediately.
A credit union loan can help consolidate debt at lower interest rates.
Credit unions usually offer lower interest rates than other types of financial institutions. By taking out a debt consolidation loan with a credit union, you can substantially help lower your monthly payments and speed up the loan repayment process.
Instead of consolidation - get real help for your debt situation.
Working with a non-profit credit repair organization can help you get a handle on your spending and instill healthier spending habits. Generally, a credit counselor will negotiate better repayment terms for you with your creditors, and help you create a reasonable budget. Then you send one monthly payment to the credit repair company, and they distribute it among your debtors by the agreed upon terms. Like anything else, be certain that you're dealing with a reputable company.
If you are, it's one of your best options, since it not only helps you repair your credit, it helps you to learn how to spend more healthily.
