Debt Consolidation Loan

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How to Get a Debt Consolidation Loan

Debt adds up. It is unavoidable. If you have collected an unmanageable amount of debt, don’t feel bad. It is more common than you think. What isn’t common is an easy exit. Whether it is a car loan, personal school loans, medical loans, or credit card loans, it is all treated the same way at the end. You either pay it off or you go into default. Default is the last thing that you want to happen. So, instead of defaulting you need to find a way to either pay it all off or reorganize the loans.

Instead of paying multiple debt collectors, why not just pay one lower monthly bill? That seems a lot better of a situation. This would allow you to know that you are paying the whole monthly allotment, and it allows you to plan your finances better know that you have a strict payment each month. To find out how you can consolidate your loans into a single monthly bill check out the following information and make sure you contact your mortgage broker for the most up-to-date information and specialized services based on your goals and needs. Mortgage brokers are your partner in this process. Don’t think you can make fully informed decisions without them.

What Kind of Debt Can be Consolidated?

All kinds of debt can be consolidated. A financing partner doesn’t see what the debt is for. Rather, all they see is that there is a bill due with your name on it. Did you buy an expensive investment that went south? You can consolidate it. Did you rack up one too many shoe sales on the credit card? You can consolidate it. Did you buy a car that was truly out of your price range? You can consolidate it. Do you have outstanding student loans? Do you have medical bills that just keep coming? Consolidate them all.

The basics of the process is to get a single loan for the amount that is owed on the outstanding debts. This loan wipes out the other balances. Then you just pay the single financer for the total under the new terms. It’s simple and powerful. It can help pull you out from under the rain and into the warm of your home again.

What Type of Loan Should I Get?

There are a couple different types of debt consolidations that you could do. When you are ready to cut ties with your current debt, then you need to contact a mortgage broker who can develop terms for a debt consolidation loan that fits your circumstances best. The best type of loan will depend on your current assets and your current income. There will be many factors to weigh and it will take some thought.

That is why a mortgage broker is best to handle your debt consolidation as their goal is to provide you with the best opportunities that they can. Don’t let a bank persuade you into taking whatever product they have. Mortgage brokers are able to look into suites of solutions and aren’t bound by the single bank solutions.

Debt Consolidation Loan

Even if you have bad credit you can apply for a debt consolidation loan. These work best for high interest debt attached to personal loans, medical bills, and credit cards. You can choose the payment terms and potentially have more time to pay off the debt which could possibly translate into a lower monthly bill. Think of what you could do with a few extra dollars each month.

There are two main types of debt consolidation loans. These loans are built to help you consolidate your debt and move on with your life. To get approved for one of these loans, you will need to pass an application process, own a home with good equity, and have a credit history. Depending on your financial situation you could receive either a mortgage refinance or a home equity loan.

Home Equity Loan

A home equity loan is the gold standard for debt consolidation. If you have a home, then the easiest way to get a debt consolidation loan is to get a home equity loan. However, to get the best deal and the best rate you will need to make sure you work with a mortgage broker. You also need to make sure that your home has enough equity to cover the consolidation of all of your loans. It would be unfortunate if you reconsolidated only to discover that you still have outstanding loans. Make sure that your refinance can cover all outstanding loans or the left over equity can cover the loans. Equity is the value of your home that isn’t encumbered with a mortgage.

So, if you have paid off your mortgage your home has 100% equity available. If you have paid off 50% of the value, then it has 50% of the equity available. It is good to understand that most financing companies and banks will only offer a home equity loan up to 80% of the home’s value. This value isn’t based on your purchase price. The value is based off the current market value of the house, or what would the house sell for on the current value. If you are paid off to 50% of the value, then you would have 30% of your home’s value left for an equity loan.

Learn More About Your Options Now

When mortgage rates are good, a home equity loan or a top up mortgage is the best way to go. However, to get a more in depth understanding of how your situation could change for the better you will need to reach out to a financial expert who can take your specific details and match you with the best offer available. Interest rates are constantly changing.

They can rise without warning. Letting an opportunity sit and wait may cost you money in the end. Proactively getting a debt consolidation loan could give you the peace of mind that you have been looking for all these years.