Consolidating your bills

Home Equity Loan (or HELOC) A home equity loan, or Home Equity Line of Credit (HELOC), allows you to borrow money against the value of your home.

The size of these loans varies, but they can often be up to 75-80% of your home’s value.

However, you must be cautious when dealing with debt consolidation companies.

Once you have agreed to the debt consolidation plan, you can’t go back, so it’s important to understand the potential consequences first.

You also must be careful not to continue using more credit (with credit cards) after entering the debt consolidation program.

And if you miss a payment (or are late) you could face costly penalties and your interest rate could be increased.The reason this can be helpful to people with a lot of debt is that it can solve three of the worst problems you face: 1) High interest rates Some types of debt (particularly credit cards) can have extremely high interest rates – up to 25% or more.If you’re in that kind of situation, there’s a good chance your debt will grow faster than you can pay it off.That can lead to a domino effect where you miss payments, your interest rates get raised, and then you can’t stay above water.A consolidation loan can sometimes lower your monthly payment, and that can give you enough breathing room to get back on track.Which is why a consolidation loan can often prove to be a better option: it may allow you to get a lower interest rate, which would save you money over the long-run.2) High monthly payments People with lots of debt also frequently struggle with high minimum payments – which are sometimes more than they can pay each month.To understand why, consider the difference between your mortgage and your credit card.The mortgage is a “secured debt” and the credit card is “unsecured debt.” That means if you stop paying your credit card bill, the lender cannot automatically take any property (or collateral) from you as a penalty.If you’re in debt, you may have asked yourself: “Is debt consolidation a good idea?” In this post we’ll help you answer that question by explaining how a debt consolidation loan works, what the alternatives are, and describing when debt consolidation can help you and when it will not. You need all the information in order to make the best decision, so that you can turn your finances around as quickly and painlessly as possible. It’s a loan that allows you to pay off your current debts with a new loan that has different terms (usually from a different lender) than your current loans or credit cards.

Leave a Reply

Your email address will not be published. Required fields are marked *

One thought on “consolidating your bills”

  1. Jamie added, "We were both in relationships, or I was just out of a relationship and he was still in one, so it was very respectful, but I always wondered about him afterwards." Well, their love story definitely has a happy ending.