If you own a home, your options for becoming debt free are numerous. In this case, you may obtain a home equity loan, line of credit, or refinance your existing mortgage. All three methods will provide you with the necessary funds to payoff consumer debts, and ultimately reach your goal of becoming debt free. Fortunately, non-homeowners also have options for reducing and eliminating debts. Here are a few tips on ways to consolidate debts without owning a home.

Credit Card Balance Transfers

If you do not own a home, but you have good credit, getting a balance transfer may be an effective way to consolidate debts. With this method, you will transfer the balances from high interest credit cards to a low interest credit card.

In some instances, credit card companies offer balance transfers with six months of zero interest. Thus, every monthly payment for six months will go towards reducing the balance. However, if you have a skipped or late payment, the credit card company will begin charging interest before the introductory period has expired.

Personal Debt Consolidation Loans from Credit Unions and Banks

Individuals with a high credit rating may be able to obtain a personal debt consolidation loan through their bank or credit union. Credit unions are better because they offer lower rates. Each bank has different lending requirements. In some cases, you may be able to obtain a no-collateral loan. This generally requires a high credit score and income.

If you do not have good credit, a credit union or bank may approve your loan request if you have collateral. Collateral includes any piece of property of adequate value. In some instances, applicants offer financial institutions vehicle titles.

Non-Profit Consumer Debt Management Programs

If you have exhausted all options for consolidating your debts, contact a non-profit debt management service. Some consumers attempt to negotiate better rates with their creditors. Unfortunately, many do not receive favorable results. Debt management programs can successfully convince creditors to waive late fees, reduce interest, etc. Because these programs are reputable, and the representatives have clout, creditors are more apt to accept negotiated terms.

View our recommended companies for Debt Consolidation Services.

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• Most any large city has a number of small shops offering payday loans. They’re often found in strip centers; sometimes they double as pawn shops. They have a simple business – they lend you money until your next paycheck. The system is pretty convenient; you write them a postdated check for the amount you’re borrowing plus interest. On your next payday, they cash the check and your loan is paid off. What many people who use payday loan services fail to realize is that the interest rates charged by these firms are substantial, often reaching the equivalent of four hundred percent per year!
  
  
• To get a secured loan it can take time for loan approval, as the property will be inspected and appraised. Unsecured loans such as credit cards are usually faster to acquire, however the loan approval time may include a credit check. A credit check involves a lender getting a copy of your credit report to inspect your credit history.
  
  
• Credit card balance transfers
  
  
• All kind of loan – educational loans, auto loans, secured loans, unsecured loans, personal loans and any kind of loans – can be consolidated under debt consolidation mortgage. It is highly appropriate to adopt debt consolidation mortgage if you have numerous debts. However, a prudent step will be to understand debt consolidation if you actually want to apply for it. Debt consolidation mortgage has the capability to be turned in a way so as to allow maximum monetary benefits. Yet, one little error with debt consolidation mortgage and your situation will be back to square one.