From Banks and Credit Unions:

In days of yore, when people needed a hand catching up on their bills, they strolled into the neighborhood bank, spoke to branch manager, shook hands on a loan, and got a check for the amount they needed. These days, while you can still get personal loans from banks and credit unions, there are generally lower rate options, such as the ones we have been discussing.

The rates are better when the loan is secured and you’ve been a bank customer for years than when the loan is unsecured and given solely against your good name. So check where you currently bank. You can compare personal loan rates in your area here on Bankrate.com’s site. (You’ll be taken through a few steps based upon your location and credit rating. Eventually, you will be given a choice between various home equity loans and personal loans.)

Pros:

Depending on your circumstances and the local competition between lenders, you may be able to get a great rate.
If you set up the loan for three to five years, you will be “forced” to stay on your debt consolidation schedule. If you let the bank take the payments from your account automatically, you may get an even better rate!
Cons:

If you have a spotty credit history with many outstanding debts, you will not be offered a great rate from a bank.
While there are many online offers for personal loans, be wary. Only go to sites you trust before you even consider borrowing in this fashion -- for example, Credit.com.
Tips:

Don’t hesitate to ask your bank or credit union to give you a better deal if they want to keep your business!
Discuss the situation with a lender before your credit report is pulled. If the bank’s terms are not to your liking, there’s no reason to have its inquiry show on your credit report.

The Most Important Tips of All:


Don’t ever let yourself get so deeply in debt again.
Pay your bills on time – even if all you can afford is the minimum. Always try to send in more than the minimum.
If you’re in a financial jam because of a situation that’s beyond your control – say an illness or job loss – get help now. You do have other options!
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*Nancy Castleman has been sharing ways to get out of debt, save money, and live better on less since 1984. For more of her ideas, visit her Web site, Good Advice Press