Can Debt Consolidators Help With My Credit Debt?

Home Equity Loans-A Way Out of Credit Debt
If you have owned your home for many years, an experienced debt consolidator will be able to show you how to access the equity that you have established to pay off your unsecured credit debt, i.e. high-interest credit cards, student loans and automobile loans. Since, at the present time, home mortgage interest rates are low, this could be the perfect time for you to refinance your home. Also, if you presently own an unpredictable adjustable rate (ARM) mortgage, it may be the perfect time to arrange for a new, fixed-rate, 15 or 30-year mortgage loan.

A debt consolidator will help you decide if you qualify to refinance your existing mortgage loan and get the cash you need to assist with your debt consolidation. If your present mortgage commitment is stable, you should consider using the equity in your home to establish a home equity line of credit, secured by your property.

Whether you are asking your debt consolidator to refinance your home or seeking a home equity line of credit, you will be able to use the very real monetary value of your home to help relieve your credit debt.

Consolidation Loans
If you, like millions of other Americans, are finding it difficult to repay your many outstanding loans, you may decide to take out a debt consolidation loan. This type of loan takes your outstanding loans and actually ‘consolidates’ them into a single loan. A debt consolidator may be able to help you:

• Reduce your monthly payments while letting you write only one check. You may even be able to set up a direct withdrawal of funds from your paycheck or checking account to relieve you of all paperwork (wouldn’t that be a relief!)
• Arrange a longer period of time to repay your debt
• Set up for a secured, predictable fixed-rate loan at a lower interest rate

Personal Loans-Another Path Out of Credit Debt
If you do not own your own home or haven not yet built up very much equity, you might want to consider having your debt consolidator set up a personal loan. Although this type of loan or line of credit is unsecured, meaning there is no collateral backing the loan, it can still be used for any purpose, including debt consolidation. Interest rates for personal loans are usually higher than for secured loans, but lower than credit card rates. Unlike secured home equity loans, however, interest payments on personal loans are not tax deductible.

According to professional debt consolidators, the following people may be good candidates for personal loans:

• Renters – if you do not own a home against which to borrow, a personal loan may be your only option, other than high-interest credit card loans
• Home owners who have used all or most of the equity in their homes
• Borrowers who are looking for a small (a few thousand dollars) or short-term loan
• Credit union members, since credit unions often offer reasonable interest rates

If you are considering a credit debt consolidation loan or some other form of Debt Management, we hope that the above information was helpful. For more credit help, please take a moment to fill out the form on the bottom of this page to speak with a member of our professional debt consolidation staff. You will be happy that you took the time to secure your financial future.