High-interest rate debt payments can put a wrench in your plans to retire early, build an emergency savings fund, or achieve other money goals. And juggling multiple loans, credit cards, or other debts with their various due dates and minimum payment amounts can create stress that you just don't need. Consolidating some of those high-interest debts and making lower payments can bring you closer to the secure financial future you want.

What is debt consolidation?

Debt consolidation is a strategy that allows you to pay off multiple high-interest rate debt obligations with a single, lower-interest rate loan.

Debt consolidation provides you with a host of benefits:

One monthly payment that simplifies debt management.
A lower-interest rate to reduce your total debt repayment amount.
With a lower monthly payment, you keep more money and pay off debt faster.

Here are four debt consolidation options that could free up money in your monthly budget and help you save money.

1. Personal Loan

A low-interest rate personal loan, such as our Any Reason, Any Season loan, lets you pay off your debts as they occur or all at once. With this type of loan, you're approved for a fixed dollar amount that you pay back over an established period of time. Use it to pay off higher interest credit cards or loans and make one lower-interest payment every month.

2. Home Equity Loan

Eligible homeowners can use the equity in their homes to qualify for a low-interest rate home equity loan, such as our Choice Home Equity Loan. The home serves as collateral for the loan. Minimum loan amounts are typically much higher than those available with personal loans.

Advantages of Home Equity Loans

Funds are disbursed in one lump sum.
Repayment terms are pre-set.
Monthly payments are predictable.
Home equity loans are ideal for borrowers who have a specific expense in mind and are ready to use the funds immediately.

3. Home Equity Line of Credit

Another low-interest rate home loan option is a home equity line of credit, such as our Interest-Only Home Equity Line of Credit. Similar to the Choice Home Equity Loan, the residence serves as collateral for the loan and minimum loan amounts are much higher than those available with other types of loans.

Advantages of Home Equity Lines of Credit

Homeowners borrow from a pre-set credit line, as needed.
Payments are only made on the amount you borrow.
Interest-only payments are possible for a set time.
Interest applies to the amount borrowed, not the entire line of credit.
Lines of credit are ideal for borrowers who need flexibility and want the security of knowing that low-cost funds will be available when they need them.

A ‘good-to-know’ note: For both types of home loans, borrowing limits are calculated by comparing the home's market value and mortgage loan balance. Other rules and limitations apply. Questions? Schedule a time to speak with one of our personal service counselors.

4. Low-Interest Rate Credit Card

Consolidate your high-interest rate debt with a low-interest rate credit card to reduce the cost of borrowing. Like a home equity line of credit, there's no need to reapply to gain access to additional funds — but you don't have to put your house up as collateral. Use what you need (up to your credit limit), and pay down the balance to access additional funds. Payments are only required on balances.

Free Financial Counseling

If you're unsure which option is the best fit for your finances, consider scheduling a free financial counseling session with GreenPath Financial Wellness. Together Credit Union members can use the service and their free online resources to create a plan to reduce debt, pay off balances faster, and stop collection calls.

There's no one-size-fits-all solution to debt management.

Your situation might benefit from one or more options presented here. Discover which debt consolidation option is your best match by taking our Find Your Debt Resolution Match quiz today!