subject: Debt Consolidation Loans Arranged By A Remortgage Or A Secured Loan [print this page] This is as good a time as any and in fact a better time than most, to take advantage of the low rate remortgages and secured loans on offer at the moment to tidy up your finances.
At the same time, arranging a rearrangement of your outgoings and money, can free up additional funds to enable you to buy or do other things.
Most people have a number of credit cards, and these cards are expensive which make them far from the best way to make a purchase.
Sometimes a credit card can be handy, and in fact essential, if buying goods on the internet, as some people selling on the internet do not accept payment by Paypal
Therefore, having one credit card can make financial sense, but there is seldom any requisite for two, three or even more cards.
When handing over a piece of plastic, it can be easy not to fully take on board just how much is being spent.
If buying goods at say 500, it would seem to be a fair amount of money if 500 in cash was handed over.
However when it is only a matter of handing over a piece of plastic and signing your name, the full sum actually being spent does not appear to register in the same way.
Interest rates for credit cards are seldom less than 20%, and can be as high as 40%, and they take for evet to clear if only the minimum payment of 3% of the balance is made monthly.
A simple solution to credit card and other debts is to organize debt consolidation, which will clear off all the other debts and leave one payment in their place.
Debt consolidation loans are not readily available to tenants, especially as they are normally quite large loans when used to pay off a number of debts.
However, homeowners are in a perfct position to arrange debt consolidation, and they have a choice of two main methods and these are secured loans or remortgages.
As secured loans and remortgages require the equity of a property, only homeowners can appply.
A remortgage is a totally new mortgage taken out with a different mortgage provider that pays off the current mortgage, while at the same time is for a higher amount than the existing mortgage, as additional sums are required to pay of all the debts.
If a mortgage stands at 180,000 and there is a bank loan of 12,000, credit cards with balances of 30,000 and a car loan of 10,000 the remortgage would be 232,000.
With secured loans, the existing mortgage stays in place and the homeowner loan is a stand alone loan.
For those tied in with a current mortgage deal, a secured loan would be the better choice, and as secured loans are more expensive than remortgages, the former could be replaced by the latter when early repayment penalties no longer apply.
