Debt Consolidation Loan
So what exactly is a Debt Consolidation Loan? Any type of a loan that will consolidate all or most of your many financial obligations into one single payment can be considered to be a Debt Consolidation Loan. It can be a home equity line of credit, fixed end home equity loan, first mortgage refinance, personal loan, or a credit card with high credit limit. Technically, as long as it will give you enough money to pay off all of your other balances it can be considered to be a Debt Consolidation Loan.
To select the most desirable Debt Consolidation Loan, one needs to weigh a number of factors. Some of the most important factors to consider are interest rate; re-payment term; monthly payments; and an initial cost to set up an account. These features will vary depending on borrower's credit rating, monthly income, and liquid asset position.
The least expensive way to consolidate debt would be taking out a 0% interest rate credit card with no annual fee, or a 0% personal loan and to create a schedule to pay it off within a reasonable period of time. Sometimes these options are not available. Credit card companies will not extend credit if balances on your existing accounts are close to their credit limit. And personal loans are not very easy to secure, unless you have a really good friend or a relative that has a lot of extra cash.
Deciding between home equity line of credit, home equity loan, and first mortgage refinance for your debt consolidation is a bit more complicated, because several factors have to be taken in to consideration. Mortgage market rate and trends are important, because if rates are low, one might want to secure a low fixed rate, and stay away from adjustable rate home equity line of credit. There a thousands of different mortgage and home equity loan programs that homeowners can use for debt consolidation, and the best way to look in to it is to speak to good mortgage brokers. They can do the math quickly and figure out the least expensive way for you to use your equity to consolidate debt.
Related Tags: consolidation, debt, loan, mortgage, equity, credit, home, refinance, second, consolidate, line
Mr.Shkolnik is a Loan Consultant employed by Express Capital Funding Group, http://www.expfunds.com He has over ten years of experience Financing Real Estate transactions.
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