Debt Consolidation – What lending options are available.
By consolidating your debts into one easy to manage loan will not only help to save you money whilst paying of the debt, but it may also be possible to cut your repayment schedule by a number of years, simply by paying the same amount as you are at the present time. There are several lending options available when looking to consolidate any debts that you have and it does not matter whether you own the property you live in or not as you can still trade in your high interest account for one with a much lower rate loan.
Homeowners - Why use the equity on your home as collateral.
However if you are looking to get the best rate available, then it may be wise to tap into the equity available on your home. There are several options available for using your equity. The first choice you have is to refinance your entire mortgage and also cash out a portion of the equity in your home as well. This will not only save you money on application fees, but you may also find that you get a lower rate of interest when you actually cash out.
The second choice available to home owners is for them to apply for a second mortgage or a line of credit with their current lenders or by many of the lending companies that are around. Both of these will allow them to keep the original low rate mortgage that they have in place but will also provide them with access to the equity that they have on their homes. You will often find that the application and miscellaneous fees they quote are often very small and most of these lending companies’ rates are close to conventional rate levels.
Personal Loans – What help is available.
However for many people who do not have property to act as collateral on a loan they can look at taking out a personal loan in order to reduce the rates that they are currently paying. Many people often find that they can cut their credit card rates by nearly half by taking out a personal loan.
A personal loan is based on a persons credit history and income, and certainly the better your credit score the better the rate you will be offered. Certainly those people who have a large income or assets will often qualify for a good rate, but even those people with a lower or poor credit rating can still lower the rates they are currently paying by use of a personal loan.
New Credit Card Account – Is this option could for small amounts.
Say for example you only have a few thousand that you wish to consolidate then it may be wise to consider taking out a new credit card account, especially one that offers you 0% on any transfers made or a lower rate than that you currently have. With such introductory offers you will find that you can start to reduce the principal amount of money that you have on debt.
However, it is important that any old accounts you have should be closed once this account has been opened so that you do not increase the damage to your current credit scoring. If you have too many accounts open not only will it reduce the amount of further credit that you can obtain in the future, but will also keep adding to the debt you already have.
It does not matter which type of option you decide to choose upon for consolidate any debts or bills that you have, it is wise to take time to investigate the lenders around and ensuring that you get the best deal available, thus saving you money in the long term.
About the Author: Allison Thompson an expert author after becoming a work from home mum who runs a small real estate company in Spain. Due to her involvement in the property market she has carried out extensive research relating to all financial matters. If you would like to learn more, please visit www.centrallendingservices.com.