subject: Are There Debt Consolidation Loans? [print this page] A debt consolidation loan might be of tremendous help in solving your problems with debt and credit cards.The best way to get a good rate on a debt consolidation loan is to use your home or other asset as collateral for the loan.
Here's the way it works; get a loan from bank or credit union, and use that loan to pay off your other debts. When you apply for the loan, let the lending officer know that you want to get a secured loan. If you have equity in your house, you might suggest taking out a second mortgage or home equity loan. The interest rate for such a loan is much less than either a personal loan or a loan secured on a car or boat.
But you do have alternatives. When you have really decided that you must reduce your debt, you have active steps you can take to manage your heaviest debts.
In addition, the length of the loan is often longer than the repayment schedule for your original debts, thus lowering your monthly payment again.
Compare paying off your debts to other investments you might make. Consider that investing your money in a bank, mutual fund, or stocks, you might realize a return of 3 or 4 percent. If you apply your extra money to paying off debt, you make an immediate return of as much as 20 percent or higher. It's a great investment!Compare paying off your debts to other investments you might make. Consider that investing your money in a bank, mutual fund, or stocks, you might realize a return of 3 or 4 percent. If you apply your extra money to paying off debt, you make an immediate return of as much as 20 percent or higher. It's a great investment!
