By consolidating your debts into one easy to manage loan will not only help to save you money whilst paying of the debt, but it may also be possible to cut your repayment schedule by a number of years, simply by paying the same amount as you are at the present time. There are several lending options available when looking to consolidate any debts that you have and it does not matter whether you own the property you live in or not as you can still trade in your high interest account for one with a much lower rate loan.
Homeowners - Why use the equity on your home as collateral.
However if you are looking to get the best rate available, then it may be wise to tap into the equity available on your home. There are several options available for using your equity. The first choice you have is to refinance your entire mortgage and also cash out a portion of the equity in your home as well. This will not only save you money on application fees, but you may also find that you get a lower rate of interest when you actually cash out.
The second choice available to home owners is for them to apply for a second mortgage or a line of credit with their current lenders or by many of the lending companies that are around. Both of these will allow them to keep the original low rate mortgage that they have in place but will also provide them with access to the equity that they have on their homes. You will often find that the application and miscellaneous fees they quote are often very small and most of these lending companies’ rates are close to conventional rate levels.
Personal Loans – What help is available.
However for many people who do not have property to act as collateral on a loan they can look at taking out a personal loan in order to reduce the rates that they are currently paying. Many people often find that they can cut their credit card rates by nearly half by taking out a personal loan.
A personal loan is based on a persons credit history and income, and certainly the better your credit score the better the rate you will be offered. Certainly those people who have a large income or assets will often qualify for a good rate, but even those people with a lower or poor credit rating can still lower the rates they are currently paying by use of a personal loan.
New Credit Card Account – Is this option could for small amounts.
Say for example you only have a few thousand that you wish to consolidate then it may be wise to consider taking out a new credit card account, especially one that offers you 0% on any transfers made or a lower rate than that you currently have. With such introductory offers you will find that you can start to reduce the principal amount of money that you have on debt.
However, it is important that any old accounts you have should be closed once this account has been opened so that you do not increase the damage to your current credit scoring. If you have too many accounts open not only will it reduce the amount of further credit that you can obtain in the future, but will also keep adding to the debt you already have.
It does not matter which type of option you decide to choose upon for consolidate any debts or bills that you have, it is wise to take time to investigate the lenders around and ensuring that you get the best deal available, thus saving you money in the long term.
Monday, November 27, 2006
Learn Before Your Leap into a Debt and Bill Consolidation Loan
Regardless of the time of year there never seems to be enough money to go around. If it isn’t the holidays, it’s your niece’s birthday or mother’s day. Just having enough money to cover your bills is challenging enough. If this sounds familiar, take comfort in knowing that you’re not alone. One possible solution is to look into a debt and bill consolidation plan.
Personal loans and credit cards most often have higher interest rates than a debt and bill consolidation loan. Basically, what you do is combine your debt and bills so that you have one monthly payment with a lower interest rate. There are a few things that you must get in order before applying for a debt and bill consolidation loan.
First things first, gather all the statements for every bill and debt you want to consolidate. Start a list and include; payoff balance, the current payment installment, interest rate charged by each company and when you will get each debt paid off at the current rate. Obviously the needed debt and bill consolidation loan will be the sum of your debts.
Before securing a loan, you will need to first consider which type fits your financial situation. You can apply for a personal loan, get a home equity loan or the popular choice of refinancing your mortgage. A comparison of each loan type will highlight their individual advantages and disadvantages.
Do you want to prolong the payoff date of your home? Or maybe that doesn’t bother you if it means consolidating all of your bills and debts. Refinancing an existing mortgage or applying for a home equity loan will push the payoff date further, but you can sometimes get the most money with these loans. A major disadvantage to remember is that you are using your home as collateral. If you have a problem making payments on your new mortgage loan then you could lose your home. However, with one of these two loan types you do get an annual tax break.
If using your home as collateral makes you uneasy, look into a personal loan. A personal loan for debt and bill consolidation will usually carry a higher interest rate than home equity or mortgage refinance loans. With a personal unsecured loan, the money loaned is based solely on your credit report. Depending on how much you need and what you’re comfortably securing your loan against, any of the three loan options may work.
The desire to lower current payments and get out of debt can be overwhelming. But before committing, you’ll need to check a few key thing.
With the list you made earlier double check that the interest rate is indeed lower than what you’re currently paying. Will the new loan be paid off sooner, in more time or about in equal time if you didn’t consolidate your loans? The best way to decide what you need to do is to get all your current financials together and then learn what options are available to you. You will learn more about your finances, how to better mange them and that may include a debt and bill consolidation loan.
Personal loans and credit cards most often have higher interest rates than a debt and bill consolidation loan. Basically, what you do is combine your debt and bills so that you have one monthly payment with a lower interest rate. There are a few things that you must get in order before applying for a debt and bill consolidation loan.
First things first, gather all the statements for every bill and debt you want to consolidate. Start a list and include; payoff balance, the current payment installment, interest rate charged by each company and when you will get each debt paid off at the current rate. Obviously the needed debt and bill consolidation loan will be the sum of your debts.
Before securing a loan, you will need to first consider which type fits your financial situation. You can apply for a personal loan, get a home equity loan or the popular choice of refinancing your mortgage. A comparison of each loan type will highlight their individual advantages and disadvantages.
Do you want to prolong the payoff date of your home? Or maybe that doesn’t bother you if it means consolidating all of your bills and debts. Refinancing an existing mortgage or applying for a home equity loan will push the payoff date further, but you can sometimes get the most money with these loans. A major disadvantage to remember is that you are using your home as collateral. If you have a problem making payments on your new mortgage loan then you could lose your home. However, with one of these two loan types you do get an annual tax break.
If using your home as collateral makes you uneasy, look into a personal loan. A personal loan for debt and bill consolidation will usually carry a higher interest rate than home equity or mortgage refinance loans. With a personal unsecured loan, the money loaned is based solely on your credit report. Depending on how much you need and what you’re comfortably securing your loan against, any of the three loan options may work.
The desire to lower current payments and get out of debt can be overwhelming. But before committing, you’ll need to check a few key thing.
With the list you made earlier double check that the interest rate is indeed lower than what you’re currently paying. Will the new loan be paid off sooner, in more time or about in equal time if you didn’t consolidate your loans? The best way to decide what you need to do is to get all your current financials together and then learn what options are available to you. You will learn more about your finances, how to better mange them and that may include a debt and bill consolidation loan.
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