It’s not easy to find ways to consolidate your debt, especially if your credit is already leaning toward the bad side. Conventional consolidation loans serve as a way to pay off multiple debts, but if your credit is below 660 then the interest rates can be as high as 30%, making it impossible to pay down the principal balance. So what are your other options?

Alternative Lending Solutions

You may recognize names like LendingClub.com, Upstart, or Avant. Peer-to-peer lending options, like these, use crowdfunding to let you borrow money from individual investors, rather than banks. These networks are great because they work toward the goal of making credit more affordable for you, while providing a reward for those investing. Multiple people may decide to invest, but you’ll still only have to make a single payment each month.

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Transfer Balances To A 0% Interest Credit Card

High-interest rates and the option to “pay minimum amount” make credit cards a surefire way to drown in debt. If you qualify for a credit card with a 0% initial interest rate, you can transfer balances of high-interest accounts to the new card, making it much easier to pay off the total amount. If you don’t qualify, you can still transfer balances to an existing credit card if you have enough available credit. Consolidating your balances into one card means fewer individual payments and a higher likelihood of paying off your debt.

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Debt Management Plan

A debt management plan, or DMP, is another credit card consolidation option. With a DMP, all of your cards are closed, your interest rate is negotiated down, and a repayment plan is set up. If you go through a consolidation company, they will handle the busywork and you will then pay them a fixed monthly payment. You can also carry out a DMP yourself by contacting each creditor and explaining your situation. The best part of a DMP: your credit score doesn’t matter.

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Home Equity

If you own a home and have built up equity over the years, it’s possible to use that as collateral for a loan. A home equity line of credit (HELOC) is an available line of credit that’s secured by your home. Once your HELOC is initiated, a “draw” period begins in which you’re only required to make monthly interest payments. This typically lasts a couple years, then you’re given a set amount of time to pay the outstanding balance in full. Debt, income and credit are all considered when applying for a HELOC.

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Cash-Out Refinancing

Similar to a HELOC, a cash-out refinance lets you use equity you’ve earned. The difference is a lender will refinance your current mortgage and give you up to 80% of the value of your home in cash. Credit requirements are lower than home equity loans, but be careful. If you fall behind on payments, your home could be up for grabs.

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