Did You Know That The Average American Household Has 13 Payment Cards — Including Credit Cards, Debit Cards, And Store Cards? Plus, There Are 1.3 Billion Payment Cards In Circulation In The United States Right Now. And, On Average, Americans Carry About $5,800 In Credit Card Debt Month To Month. If One Were To Make Only The Minimum Payment On That Debt Each Month, It Would Take 30 Years To Pay Off — Including An Additional $15,000 In Interest. Welcome To DebtConsolidationSite.com. We'll Provide You With Articles, Tips, And Tools That Will Help You Regain Control Of Your Credit. As
you explore this site, you'll discover...
|
What Your Banker Won't Tell You About Debt Consolidation
|
|
Hot: Which Is Better -- Consolidation Or Bankruptcy?
|
|
How To Consolidate Without Damaging Your Credit Score
|
|
Can You Really Get Credit After Using A Debt Service?
|
Remember... If You Are Looking For Quality Information, Add This Site To Your Favorites Right Now, As We Update It Daily With The Latest News And Information. Enjoy The Site.
|
Everything
You Must Know About
Debt Consolidation Loan Rates, Student Loan Debt Consolidation, Debt Consolidation Mortgage Loans, Credit Card Debt Consolidation Loans, And Debt Consolidation Loans For People With Bad Credit.
|
|
 |
|
|
The easy way to get control
of your debt...
|
|
| |
|
| |
Dangerous Debt Consolidation Loans
Author: Kevin Adelsberg
Now that the frenzy of refinancing has tapered off, many mortgage lenders have turned to alternate methods of marketing their services. Many banks have started pushing harder to sign up customers for home equity based debt consolidation loans.
On the surface, debt consolidation loans offer cash-strapped consumers some relief from high interest rates. Looking deeper, consumers should be wary of both the pros and cons of this fast growing practice.
In their simplest forms, debt consolidation loans are refinance agreements, second mortgages, or home equity loans. All three loan options allow homeowners to cash out part of the equity in their homes in order to pay off other debts. For borrowers who have watched their homes appreciate in value, a debt consolidation loan can eliminate the burden of multiple monthly payments without significantly affecting the amount of their monthly mortgage payment.
On a mathematical level, debt consolidation loans can make much sense. A home owner who struggles to make the monthly minimum payments on her 21% interest rate credit cards can roll those balances into her 7% mortgage. The debt doesn't go away, but the rate goes down by two thirds. In many cases, she would only continue to pay about the same amount per month for her mortgage, freeing up her cash flow for other uses.
As a side benefit, borrowers can deduct a portion of their mortgage interest payments from their income taxes each year. Though not a huge savings, many taxpayers love the opportunity to look forward to a larger tax return.
The danger lies in the borrower's loss of security on two levels. First, if a home should suddenly depreciate, a debt consolidation loan customer could quickly find himself or herself "upside down" on the loan, owing more than what the house is worth. As long as that borrower continues to make payments, they'll survive. But, they will be unable to sell their home without absorbing a loss. For families who need to move in order to accept job transfers or pursue educational opportunities, this can be a devastating blow.
Second, although the lending bank handles paying off the customer's outstanding debt, the customer must personally close their old credit accounts. For many customers, the temptation to keep those accounts open is far too great, and they find themselves deeper and deeper in debt. In effect, the debt consolidation improved their cash flow, but reversed their financial course. Without immediate intervention, these customers often find themselves on the road to bankruptcy.
When investigating debt consolidation loans, consider your long-range plans. If you intend to stay in your current home for a long time and can handle the potential risk of depreciation, and if you can exert the willpower to close out your paid off charge accounts, then a debt consolidation loan may be a reasonable option for you.
About the author:
Kevin Adelsberg is a writer for FDLoans.com
For additional articles and an extensive resource for
everything about loans, please visit us at
http://www.FDLoans.com
Article Keywords:
'Debt Consolidation'
|
 |
Recently, an interesting
email came across my desk. I'll paste it below.
Check it out...
|
|
Dear Anthony-
HELP I am in over my head
and I obviously need help. I owe just over $12,000 on two credit
cards. I know in
the past you recommend debt consolidation. But, I have read about
of the SCAM artists out there. Is
there someone I can talk to that you recommend? -Dan, New York
There are a lot of things to watch out for when it comes to debt consolidation. I
have a company I wholeheartedly recommend to others in need of help. I
find them fair, easy, and they don’t use “high-pressure” tactics.
Press the link below to check them out now.
|
|
|
|
|
