Debt Consolidation loans allow you to put most or all (depending on what funding or lines of credit you have available) of your debt onto one line of credit, or loan, to reduce interest and monthly payments.
What Kinds Of Debt Consolidation Loans Are Available?
There are various options to choose from depending on your situation. Some of the available options you can look into: -Refinance or Home Equity Line of Credit (HELOC) -Balance Transfers -Personal Loan
How Can A Refinance Or HELOC Help You?
If you are a homeowner and your mortgage is in good standing, you can use the equity you have in your home to cover a debt consolidation loan. Don’t worry if your credit is in bad shape because you have too much on your credit lines. Your mortgage company will consider that when approving you for a refinance.
What Is A Refinance?
Completing a refinance on your mortgage means you are taking out a new loan through a mortgage company and applying it to the old one to pay it off, plus whatever you are using the new funds for. Generally, you need to own the house for at least two years before you can refinance because you have to make the payments and build equity over time.
A home equity line of credit (HELOC) is a line of credit from the equity you have on your home. If you don’t want to go through a refinance process, this is a good option because you will still pay less interest than you pay on your other lines of credit combined.