Debt Consolidation
Debt consolidation can be your saving grace.
Debt consolidation is one of the most feasible debt relief options. The option can help you sleep better at night if you’re overwhelmed by debt. You may have multiple bills coming in, and you are finding it difficult to keep up.
Perhaps you were too happy to accept every pre-approved offer that came your way. Many are lured to offers with low introductory rates, for example.
This involves getting one loan that covers all your debts so you only make one monthly payment. The goal here is to remove the debts with high interest and to maintain one lower monthly payment with a reduced interest rate.
One of the most popular kinds of debt consolidation loans is a home equity loan or HELOC. This will involve putting your home on the line for collateral.
The benefit of this debt relief option is that it focuses on one payment with lower interest (usually about 4%-9%). This option should only take place if the monthly payment is less than the total of all the other debt payments combined.
Do not fool yourself just because you think it will be easier to have one payment. If the math does not add up to a lower payment, you should not consider this option. This option will also have a negative hit on your credit for a short time. However, your credit will soon pick up after you have settled your debts on time.
It is very important to keep yourself on track because your home is at stake. If you are unable to pay for the Home Equity Loan, there’s a very good chance that foreclosure is in your future. You must stick to your budget plan and pay the loan according to the terms set forth.