of your most expensive debts first.
Debt consolidation loan
A debt consolidation loan is a type of personal loan designed to help you get out of debt faster by combining multiple debts into a single account, potentially with a lower interest rate. But for this method to be worthwhile, you’ll need to have good-to- excellent credit and solid financials. Otherwise, you won’t be able to save on interest.
Balance transfer credit card
A balance transfer consists of moving existing balances from multiple credit cards into a new card with a 0 percent introductory APR. This can help you pay off your debt faster by allowing you to tackle your principal, without having to pay interest for a specific period — typically 15 to 21 months. That said, balance transfer cards tend to have lower limits than debt consolidation loans, plus are limited to credit card debt only. You’ll also likely be charged a balance transfer fee of between 3 and 5 percent of your overall balance. And if your offer expires before you’ve paid off your balance in full, interest will apply to any remaining amount on your account. What’s next? If your goal is to reduce debt, take inventory of your financial obligations, as well as your assets and monthly gross income. This will allow you to see where there’s room for improvement and help you determine which paydown strategy is the best for you. This chapter is taken from BankRate.com and includes a great calculator. https://www.bankrate.com/personal-finance/debt/ debt-payoff-calculator/
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