If you’ve got debts scattered to the four winds, some debt consolidation options might seem like a great idea to you. You could stop the hassle of paying a whole bunch of credit card or other loan bills each month, plus it may alleviate a lot of stress knowing you owe fewer people money. How exactly should you do it, though? There are a lot of options for consolidating debt these days. Here’s a quick rundown of several of the options available.

Sale-Leaseback

A sale-leaseback will allow you to sell your home, gaining you access to your home equity so you can pay off your debts, but then turn around and lease your home so you don’t actually have to move. The best part about this solution for debt consolidation options is that it's not a loan, so you don’t have to pay any interest and fees are relatively low. Some sale-leaseback programs also give you the option to buy back your home.

Personal Debt Consolidation Loan Options

This unsecured form of credit could give you debt consolidation options for one monthly payment. This method will likely work out much better if you have a decent credit score, though, as the terms of these types of loans vary a great deal.

Borrow From Loved Ones

While you likely won’t have to pay as many fees, borrowing from loved ones can work as potential debt consolidation options for you. However, it can add a lot of strain to a relationship if repayment doesn’t occur as expected or the lender winds up in financial trouble down the road. If you do choose this route, be sure you set up a contract that includes an appropriate amount of interest and make all payments on time.

Get a 401K or Life Insurance Policy Loan

With both these debt consolidation options, you’re borrowing money that is already yours. The big caveat is that that money was intended for your future or your loved ones’ security. 401K loans will require that you pay back what you borrowed, possibly with interest, but a loan on your life insurance doesn’t always require repayment. The money is simply taken out of the amount of money your family will receive when you pass on.

Transfer Credit Card Balances

If you have access to a credit card balance large enough and your cards will allow it, you can transfer credit card balances to one card, ideally one with a lower interest rate, turning it into one monthly payment, as other debt consolidation options your debt. However, be wary of low introductory interest rates and be sure you pay off the balance before your interest rate goes up if you opt to get a card with a low introductory rate. Another potential downside is that you may have to pay transfer fees to do this.

Taking Out a Home Equity Loan

Home equity loans offer decent interest rates and typically give you a long time to repay them, but whether you’re eligible at all or what your interest rate will look like will depend on your credit score. You also have to acknowledge that defaulting on a home equity loan could mean you lose your house.

Liquidating Assets Independently to Pay Off Debt

Take a look around and assess the items you own that could be sold to bring in some cash. This could be anything from vehicles to properties to memorabilia. If you could sell these unneeded items for enough to pay off your debt, this might be a good option for you.

Key Takeaways

Depending on your situation (i.e., how much debt you have, your credit history, etc.), you’ll have to parse out which debt consolidation options are the best for you. If a sale-leaseback interests you, talk to a financial advisor to see if it makes sense for your circumstances.