Shed The Debt Burden With a Debt Consolidation Loan

October 19, 2009

Debt Consolidation Loan:  You need to take early action when repaying debt. When looking at taking a secured debt consolidation loan it will make sense because you can get rid of old debts with ease and reduce your financial burden.

Often you may even be able to get a debt consolidation loan even though you may have had some minor credit problems in the past. A debt consolidation loan will immediately settle the total outstanding amounts of credit cards, personal loans and store cards.

These types of debts are expensive, therefore getting rid of them with one big loan has many advantages. One huge advantage is that your monthly expenses will be drastically reduced, because this large loan to one institution costs must less than numerous payments to various creditors.

This means that you’ll have much more money saved every month to use as you please. You get much needed relief from the bigger debts by using a secured debt consolidation loan because it allows you apply for larger amounts against an asset of big value like your home.

The loan can be any amount, as long as you can afford it and there is enough equity in your property. The loan can also be repaid with the existing loan period or it can be re-scheduled or refinanced to 20 or 30 years.

Because you’re borrowing against a fixed asset with large value your interest rate will be much lower than unsecured loans. What’s more, if you have a good credit profile you’ll enjoy a debt consolidation loan at a lower interest rate.

If you have had credit problems in the past you will be penalized by paying a higher interest rate. To get competitive interest rates, go online and look for a reputable mortgage broker to do your debt consolidation loan as they can go to the various banks and seek the best rate.

Always make sure you pay your full installment on the debt and on time.

Debt Consolidation Loans

October 12, 2009

If you are interested in finding out about debt consolidation loans then click the link.

What are Your Options to Consolidate Debt

October 6, 2009

Should one consolidate debt in a time when interest rates are so low? Is it a good thing? The correct answer would be absolutely ‘yes’.

Why do so many people shy away from the option to consolidate debt? To answer that question we’ll discuss 2 options and what their good and bad points are.

Consolidate Debt with a Personal Loan.

If you try to consolidate your debt with a personal loan you will probably end up paying a large installment because personal loans go up to a maximum period of 5 years.

The interest on a personal loan is also much higher than a home loan. If you are not a home owner, then a personal loan is the only option you have if you want to consolidate debt.

Have a look at the various accounts you want to settle and compare that to the personal loans’ interest rate and decide if it would be worth while. As a last resort to improve monthly cash flow – add up what you want to consolidate and compare that to what the new personal loan installment will be and see if you will be better off at the end of the month.

Consolidate Debt with a Home Loan or Refinance Loan

If you are looking at using your home loan to consolidate debt it would be a wise option. This is because interest on a home loan (at time of writing this article) is only 10.5% and all other debts normally average to more than 20% p.a., so this shows you will save quite a bit per month.

You will immediately see a drastic improvement in your monthly cash flow after you consolidate debt, but remember, you should put at least half of what you now have extra into your bond account, otherwise you’ll be paying off those debts over 20 years.

So yes, by getting a loan to consolidate debt you could significantly improve your monthly cash flow, but you must look at the various interest rates and monthly installments before blindly going into it.

Click here for more information on how to consolidate debt.