ADVANTAGES OF DEBT CONSOLIDATION
Posted on June 18, 2009 at 1:38 am
can you tell me why i should consolidate my debts and not file for bankruptcy?
Posted on June 18, 2009 at 3:13 am
The most obvious answer would be this: bankruptcy will put your credit in awful shape. Your credit report will reflect utter awfulness. My credit score went to an all-time low when i filed for bankruptcy. so i suggest that You stay away from it. thank you very much
Posted on June 18, 2009 at 3:40 am
Debt consolidation in general allows you to take one loan to pay off various other loans. In addition you'll have a lowered interest rate and possibly extend the repayment term. You'll also have lower monthly repayments. You'll be better able to work through your budget because the payments are manageable.
Of course all of these are possible if you are disciplined enough to stick to your monthly budget. Or else going the route of consolidation would be in vain.
Posted on June 18, 2009 at 3:59 am
There are actually two kinds of debt consolidation loans, and these are secured and unsecured. A secured loan puts up a certain piece of property as collateral for the loan; an unsecured loan on the other hand does not require the debtor to secure something for the loan.
If you're going for a secured loan, say for example your home equity loan, the funds would be readily available, especially if you're a homeowner-- after all you already are paying on the equity anyway. The interest payments on your mortgage loan would also be tax-deductible. Getting an unsecured loan, on the other hand, enables you to make payments easier, considering that you only need to make one monthly payment.
Posted on June 18, 2009 at 4:48 am
When you acquire a debt consolidation loan, you are in effect paying off your credit cards and other loans with yet another loan. Just like what was mentioned earlier, the most typically used loan is a second mortgage or home equity loan. Many debtors choose to utilize their home's equity due because it has a smaller interest rate, and in effect, you won't be repaying as much. In effect, you will be paying for this loan in a much shorter period of time.
The interest on the debt consolidation loan is also tax-deductible, and can prove to be beneficial on your end especially if you don't have a lot of tax deductions.
Posted on June 18, 2009 at 5:13 am
If you also make just one payment monthly, that lessens your chances of having too many things to think about. You'll have lesser chances of forgetting which bill to pay for--and that proves to be really convenient on your end.
Posted on June 18, 2009 at 5:29 am
what if i don't have my own home? i'm just living at friend's house. are there any alternatives to the second mortgage?
Posted on June 18, 2009 at 6:11 am
You can roll over the balances using a zero-interest or low-interest credit card. Once you acquire that account, you may use it to pay off your other debts. Of course in choosing this option you need to practice extra care in making your monthly payments. It may bring you more harm than good in the event that payments on this particular loan are missed.
Posted on July 22, 2009 at 12:10 pm
What are the advantages of debt consolidation for someone who is behind on their monthly payments?
Posted on July 22, 2009 at 2:22 pm
The advantages of debt consolidation for someone who is behind on their payments depends on how they consolidate. If it is through credit counseling, it may allow them to get current again and pay off their debt at a lower interest rate. If it is through debt settlement, it allows them to make a lower monthly payment, potentially save a lot of money and avoid filing bankruptcy.
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