So instead of having to send a separate payment to each creditor or collector every month, you’d make just one.This can help eliminate missed or late payments and ensure that you’re addressing all your debts.
(We’ll get into the details of those options later on.) No matter what strategy suits you best, the idea is the same: Lump together all or most of your debts into a single payment as a way to save money, simplify your finances … For example, if you have multiple high-interest credit card debts and outstanding medical bills, you may want to take out a personal loan to repay those debts.
Then you can focus on repaying that personal loan, which requires just one monthly payment and, ideally, has a lower interest rate than what you were paying across multiple debts (it may not have a lower rate, but it’s in your best interest to find the lowest one you can).
“If you’re not absolutely positive that you can pay off your debt in that time frame or if you think you might struggle with building up your debt on credit cards once again, I think getting a new credit card is probably not a good idea,” said Germano.
A home equity loan gives the borrower access to home equity in cash, which can be used to pay off other debts.
Creditors do not have liens (a right to take possession) on any of your assets.