CONSOLIDATE DEBT NOW BLOG

Posts Tagged ‘flexible terms’

Eliminating high interest credit card debt sounds easy but for the average consumer it’s not.  A simple consolidation loan is the quick answer for most but what happens when you are carrying debt in excess of $10,000.00?  Most financial institutions are not willing to hand out large unsecured consolidation loans.

 The only solution then to eliminate high interest credit card debt is to get a secured loan.  In today’s trying times financial institutions are looking for an assurance that if you are going to borrow money from them they are going to get repaid.  More and more people are finding out very quickly that the only way to borrow money is through a secured loan.  Having said this, the best way to go about clearing up your high interest credit card debt is to use the equity in your home. 

 Using the equity in your home can be a great way to clear up all of your debt and make your monthly payments more manageable.  The average credit card interest rates start at 19% and the interest is compounded monthly.  A consumer carrying $20,000.00 in credit card debt accumulating 19% interest would have to pay $518.81 for 5 years to repay this debt and would pay over $11,000.00 in interest along the way.  Now imagine the same consumer consolidating this into a secured line of credit or combining the debt into a new first mortgage.  Even if we assumed that the new secured loan’s interest rate was 5% (which is high given today’s interest rates) the consumer would save over $150.00 per month and pay 1/4  of the interest they otherwise would.

 So what is the process?  You could start by calling your current mortgage company/holder but this does not guarantee you the best interest rate or for that matter an approval.  A lot of banks have strict lending criteria and because you have equity does not mean they will approve you.  The best way to ensure that you get the best interest rate, most flexible terms and an approval is to contact an experienced mortgage broker.  This will ensure that your application will reach a variety of lenders both large and small to ensure that you are getting the most flexible terms and the best interest rate.  It also gives you an added assurance in the event that one bank declines you there are still a number of options present to you that you would not otherwise have if you just contacted your bank.

An accumulation of high interest credit card debt can be the result of a number of things.  It could stem from a lost job, an unexpected expense or simply just overspending.  Regardless of how the debt was accumulated there is a solution out there for just about anyone that has equity in their property.  Even if your circumstances seem dire there are options out there for you; it’s simply a matter of finding someone that can help you access the equity in your home and finding the right person that will look after your needs and fight to get the best possible rate for you. 

 Eliminating High interest credit card debt can be overwhelming.  It can lead to poor credit, bankruptcy and over time can have a drastic impact on your overall financial well being.  Finding a way to effectively deal with this kind of debt can be stressful and difficult.  Make sure that you consult a mortgage broker that is experienced in dealing with creditors and that is willing to take the time to assess your needs and find a solution that is right for you.