subject: Debt Consolidation Loans – The Best Options To Get Out Of Debt [print this page] Debt Consolidation Loans The Best Options To Get Out Of Debt
Consolidating debt with a loan used to be relatively common, but things have changed in recent years and this debt relief option should be considered carefully. And actually, for a great many people this option of debt elimination will not be possible. There are certain conditions that have to exist before you can get a loan for consolidating your debt.
Loans for debt consolidation are almost always secured with your home. So, if you do not a home or do not have equity in your home this is not going to be an option for you. If you are not credit worthy, this will also keep you from getting a debt consolidation loan. You may even have difficulty finding a lender to give you a debt consolidation loan. Lenders are very apprehensive about lending at the current time.
Provided you are able to find a lender that will give you a loan, you will most likely be able to get an interest rate that is lower than most credit cards. You will also be able to deduct the interest paid on your income tax. Your monthly payment may be lower than the combined payments you were making, but chances are your repayment period will be longer. These are a few of the positive things about a debt consolidation loan. But they are overshadowed by the risks involved with this type of financing.
The big risk is in the debt being secured with your home. It is widely known that many people are losing their homes foreclosure and this could be your fate, if you are not able to make the payments on this loan. The other big problem is the newly available credit on your credit cards. Many people cannot resist using these credit cards again and that puts them in a situation that will leave them paying both a debt consolidation loan and a credit card payment. In this situation, your debt is not resolved. It is compounded.
If you are looking for a method of debt consolidation, a consumer credit counseling can offer you an alternative for consolidating your unsecured debts where only one payment is needed each month. You do not need to own a home or have good credit. It is as simple as getting a quote and enrolling your accounts in a debt management plan. You can get started as soon as today, by getting a free quote for debt consolidation.
