If borrowing money for your debt consolidation is what you’re planning to do, then you need to keep track of how much money you’re spending. If you think that you are able to do this, then I might be a good idea to apply for a home equity debt consolidation loan.
Refinance Your House Payment
If you’re a homeowner, you can take out a loan against the equity that you have in it, or refinance it so that you can have the equity and use it to pay off your debts. Refinancing your home to get the cash to pay off your debts is usually the option with the lowest interest rate.
When you are refinancing your home, you may want to consider restructuring the term of your mortgage, and lower the interest rate. If you’re lucky it won’t cost you very much and you could scrub years off of your mortgage and save thousands of dollars for a small fee.
A second mortgage is another option for you to use in order to consolidate your debt. If you’re not able to get a refinance done you may be able to get a second mortgage so that you can pay off the debt. If you can avoid doing it this way you might want to because you will end up having to pay closing costs that are equal to the amount you paid on your original loan.
Home Equity Line of Credit
Home equity loans are different than a second mortgage, and in fact they work more like an open account kind of like a credit card.The interest rates for home equity loans are usually higher than they would be a second, simply because there are a lot more convenient to get money out of. The interest rates for these loans still isn’t that high. This is a really good way to consolidate your debts and get your outstanding balances is paid off.If you get one of these loans, you need to be sure that you use it to pay down your debt instead of getting further into debt.
All of these are truly great ways to get rid of the high interest burden from credit cards off of your back. If you have any equity in your home at all, and are struggling to meet those monthly bill payments, then it may be a good idea for you to apply for a home equity debt consolidation loan today.
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