Consolidate Debt Loans

Why Would You Want To Consolidate Your Debt?

There are two reasons most people look to consolidate their debt. The first, and probably most common reason is to lower payments. Consolidate Debt Loans usually spreads out debt payments from 3-5 years to 15 years or longer.

The other reason is to lower the cost of interest. By exchanging a 18% credit card debt for a 8% home equity loan, the borrower can save 10% worth of interest payments.

A result of Consolidate Debt Loans is that instead of 10 separate payments to 10 separate creditors, only one payment will be made to one creditor. One extra benefit of debt consolidation is the simplicity of only having one payment vs. the 10 payements. 9 fewer bills to read, 9 fewer checks to write and 9 fewer payments to mail (and hope they get there on time).

Types of Consolidate Debt Loans.

The most common way to consolidate debts is a Debt Consolidation Loan or a 2nd or 3rd mortgage that consolidates debts by borrowing against the equity in real estate (usually a personal home) and paying off debts. Consolidate Debt Loans has become a large part of the lending market in recent years.

Consolidate Debt Loans, even with Bad Credit?

Many lenders even have options for consumers with bad credit. Consollidate Debt Loans even with bad credit is now common. Debt Consolidation Loans are even avaliable online. Several lenders and brokers advertise Online Debt Consolidation Loans.


Consolidating debt for tax savings?

Some even advertise debt consolidation mortgages as a way to save money on taxes by increasing your home interest deduction.
Do I have to own a home to get a consolidate debt loan?
Consolidate Debt Loans do not have to be a 2nd or 3rd mortgage or home equity loan. It can be a signature or personal loan. Signature or personal consolitation loans will usually carry a higher interest rate than Consolidate Debt Loans based on real estate equity.


Disadvantages Of Debt Consolidation

Consolidate Debt Loans Will Charge More Interest.
There are some disadvantages to debt consolidation and consolidation loans. First is that although they may lower your payment, over the long run you will pay much more in interest than you would just by paying off your debts as normal. By extending your payments out for 15 years or longer, you can drastically reduce your monthly payment. But you will also pay nearly twice as much in interest.


Debt Consolidation Can Be Expensive

A debt consolidation mortgage loan will probably cost you something. You may not have to pay it out of your pocket, because the lender will be happy to loan you additional money to cover the costs of the loan. Also some "services" charge hefty fees for their debt consolidation services, whether they secure you a single loan or just make the payments for you. Remember, someone is always making money - even at many of the so called "non-profit" companies.

Don't Fool Yourself With Consolidating Debt

Some people consolidate their debts, get a lower payment and start right back on the payment-debt treadmill. "Now that my payment dropped from $500 to $200, I can afford $300 more per month in payments. Time to get me a new car!" - WRONG

You are just getting yourself into more debt and more trouble. Remember the original goal is get out of debt completely. Not just spend and aquire debt until you max out what you have to spend each month. Don't fall into the debt trap where a consolidate debt loans just leads you to more debt. Either you need steel-studded discipline or you may need to look into debt consolidation alternatives.

So what are the alternatives to consolidate debt loans and mortgages?
Pay If Off - Duh!
OK, enough of the sarcasm. Really, you could just work on paying it off. If you can afford your current payment for the next few months, you should look into just paying your debt off rather than spending more money and taking the added risk of a debt consolidation loan.

What's the best way to pay it off?
The two best methods for quickly paying off your debt include windfalls and a debt reduction plan. When ever you receive money you were not expecting or counting on (not your regular pay) apply that money to your debt (even if it is a consolidate debt loan). You will never miss the money and you just bought yourself an 8%, 10%, 18% even a 25% investment. Its just like putting that money into the stock market and getting a 25% return!

How do you figure that?

Well if you have a credit card, card loan or store account that charges you anywhere from 8% to 25%, by paying off part of that debt, you just saved yourself from being charged that much in interest. That is money you will not have to pay, you get to keep in your pocket. Maybe not today, but it makes that debt be paid off sooner and you will not have to pay that interest for another month or two.

So if the stock market, mutual funds or real estate scare you - invest in yourself first!

Debt Reduction Plan

A debt reduction plan is a written plan for how you will pay off all your debts. What order you will pay them off and how much to pay each month on each debt. It can also show you about when your debts will be completely paid off and when you will be debt free!

But creating a debt reduction plan can be complicate. Which debts do you pay off first? How do you figure out how much to pay each month? Just how long will this take?
A "Simple" Solution: