They swim in debt. You have 4 credit cards maxed, car loans, consumer loans, and a house payment. Simply making the minimum payments is causing your distress and certainly not the exit from debt. What should you do?
Some people think that debt consolidation loans are the best option. A debt consolidation loan is a loan that paid for many other loans or credit lines.
I am sureYou have the advertisements of smiling people who decided to have seen a consolidation loan. They appear to the weight of the world had lifted off their shoulders. But are debt consolidation loans a good deal? Let's examine the pros and cons of this type of debt solution.
Pros
1. A payment against a lot of payments: The average citizen of the USA pays 11 different creditors every month. The production of a single payment is much easier thanfind out who pays how much and when. This makes managing your finances much easier.
2. Reduced interest rates: Since the most common type of debt consolidation loans home equity loan, a second mortgage, the interest rates will be lower than most consumer debt interest rates. Your mortgage is a secured debt. This means that they are something they can take from you if you do not have to do with your payment. Credit cards are unsecuredLoans. They have nothing except your word and your history. Since this is the case, unsecured loans typically have higher interest rates.
3. Lower monthly payments: Since the interest rate is lower and because you make a payment vs. many is the amount that you pay every month decreased significantly in the rule.
4. Only one creditor: With a consolidated loan, you just have to deal with another creditor. If there are any problems or questions, you will make only one thingCall instead of several. Once again, this simply makes controlling your finances much easier.
5. Tax breaks: the interest is paid on a credit card money out the window. Interest paid to a mortgage can be used as tax write-off.
Sounds good, right? Before you run and get a loan, let us on the other side of the picture - the cons.
Cons
1. Easy to make any further debt to endure: With a lighter load, and more money left over at the end of the month, itmight be easy to restart or continue with your credit card spending habits that got you into such credit card debt in the first place.
2. Longer time to pay off: Most mortgages are the 10 to 30 years range. This means that instead of spending a few years more of credit card debt, you will spend the length of your mortgage always out of debt.
3. Spend more over the long term: even if the interest rate lower if the takeoverLoans over a period of 30 years, you can end up with more money than you would if you had kept each individual loan.
4. You can lose everything: Consolidation loans secured loans. If you do not pay the unsecured loan credit card, it would be a bad guest, but at home would still be secured. If you do not pay secured loan, they will take whatever secured the loan. In most cases, this is your home.
As you can see, consolidated loansare not for everyone. Before you make a decision, you need to look realistically at the pros and cons to determine whether this is the right decision for you.
0 ความคิดเห็น:
แสดงความคิดเห็น