Debt Consolidation
Reducing Debt Through Refianancing - A Homeowner Option
Some homeowners investigate refinancing for the sole purpose of debt consolidation. This is often true for home owners with high interest credit card debts. A debt consolidation loan gives the homeowner access to the existing equity in their home to use as collateral to secure a lower interest loan which is large enough to pay off the existing balance on the home as well as other debts such as credit card debt, student loans, car loans or any other debts the homeowner may have.
When refinancing for the purpose of debt consolidation there is not always an increase in overall monthly savings. If you're looking to consolidate debt and often struggle with the current monthly payments refinancing may be an option to make it easier to manage your monthly bills.
Additionally, debt consolidation can also simplify the monthly bill paying process. For some homeowners overwhelmed by the amount of bills they have to pay each month participating in monthly bill pay program may be the best option. Sometimes it is not the amount of the bills but the volume or act of writing checks each month and being sure they get sent, on time, to the correct location can be overwhelming. This is why many homeowners often refinance their current mortgage to minimize the amount of payments they make each month.
Debt Consolidation Companies
When debt is piling up, you will find your stress and anxiety levels are at an all time high. Worrying about debt will cause sleepless nights, bouts of depression, and can take over your life. When you feel that things look hopeless, it may be time to look into debt consolidation companies to help relieve some of your stress. Debt consolidation companies specialize in helping you reduce and eliminate your debt. They can help you lower your interest rates, advise you on what debts you should pay off first, and give you a plan of action for taking back your life, and your sanity.
When it comes to debt management, debt consolidation companies specialize in helping consumers who are in over their heads. This happens more frequently than you might think, and no one is totally immune to debt problems. Even with the best credit history, things can come along that throw you off track like divorce, or a major life trauma. Debt consolidation companies already have plans in place to help you out. Many times they have special relationships with creditors, and will work with them on your behalf to lower your monthly payments, or to reduce your overall interest rate. These things will help you reduce your debt.
Other debt consolidation companies may offer you a loan to help you clear up your debts. When you go this route, your debts are paid off, and you have loan payment to make each month to that company. If you decide to go this route, make sure you are not getting an outrageous interest rate that will put you right back into debt.
When looking into companies for help, remember that not all debt consolidation companies are created equal. Some charge a fee for their services, while others claim to be free. You should ask a lot of questions before committing to any program. There are many debt consolidation companies that offer their services online. While many of these are great, make sure you are talking to a real person before you commit. Simply signing up on a website and committing to their services might be a mistake.
You should also check with the Better Business Bureau before signing on with any of the debt consolidation companies you are looking to for help. This will tell you if they are legitimate, or if they may have had some unresolved issues with customers in the past. The last thing you want when trying to lower your debt is to add more problems on top of it.
Before you make any financial decisions on refinancing and using your home as collateral make sure you review all your options and get good council if needed.
Information on this site is provided for informational purposes only.
