Everybody knows about debt consolidation loans. These are the handiest tools for indebted people seeking relief. However, there are more alternatives you can use as well. Debt consolidation loans are feasible but more often than not, they can turn very sour and can bury the person in even more debt when they are not careful in using their loan. The following five tools are an alternative to debt consolidation.

Let’s proceed and give a brief explanation on each of them, with an emphasis on what they do and how they do it.

You Can Consolidate Debt With:

  1. P2P Loans (Peer-to-Peer)

In comparison with debt consolidation loans, which are taken from financial institutions, usually from banks, P2P loans are taken out from individual lenders. The greatest thing about these is that they have incredibly low rates.

When you’re already in debt, low interest rates should be your primary focus. P2P loans also have the advantage of being approved a lot faster than the loans for debt consolidation. This basically means that you could get the money in 48 hours or even less.

The term on these is often fixed, so you know you have until “then” to repay the debt. P2P loans don’t get anywhere near as much credit as they deserve.

  1. Use Your Superannuation

This should be used in a worst case scenario when, for some reason, you cannot get a debt consolidation loan nor a P2P one. You can consolidate your debt by getting money against your pension plan.

In this case, you’ll have to repay the superannuation, and not a lender, which can be more favorable, since you’ll benefit from low interest rates. This is like the Holy Grail of consolidating debt, but it is a risky move, and you should give it some extra thought.

  1. Transfer Your Balance

If you’ve got credit card debt, you can get rid of it by moving it to a new card that has a better interest rate. This way, it will be easier for you to pay it. In order to get such a card, however, you must have a pristine credit score.

Here’s a secret: you can get a card that has 0% interest rate. Yes, 0%. This is some sort of discount, and like any other discount, it will expire. If you do get it, make sure you’re using that period to rip through your debt.

If you don’t, you’ve wasted a huge chance of consolidating your debt, and you might not get another one.

  1. Consolidate against Your Home Equity

Again, a very dangerous move, because you put yourself at risk of having to deal with foreclosure. Like in the case of borrowing against your pension plan, here you’ll be paying yourself back, too.

This comes as a package deal with lower interest and peace of mind because you won’t have to come to terms with god knows what dire creditor. Be careful to the fact that there are two choices you can make when borrowing against the equity in your home.

You can either get an equity line of credit or a home equity loan. Both can be used for debt consolidation, but they have different features.

  1. Use Your Life Insurance

You can borrow money against your life insurance, as well. This, too, is risky, so you should be very cautious what you’re doing if you have no other option. The thing is that you can borrow the sum of the policy, not a dime more.

You can consolidate your debt with it, of course, if you have enough money in the insurance, to begin with. The good thing about this option is that you won’t need to make repayments.

You will have to repay the debt, obviously, but not through traditional means. This is due to the fact that the money in the insurance is yours. You can choose not to replenish the money, but you and your family will have no coverage in case the unpredictable happens.

This method is the less efficient because it’s less likely that you’ll have enough money in your insurance to be able to enact debt consolidation. If you do, you’ve just saved yourself.

When in doubt, talk to a professional financial advisor and ask for his/her opinion to find out if you should go with a certain method or not. One thing is sure: any of these is less perilous than a debt consolidation loan anyway because they all come with low interest rates.