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Debt Consolidation Loans
Offers for these financial products may show
up in your mailbox or e-mail everyday suggesting this as the
solution to your growing debt problem. A major selling point
of consolidation loans is convenience. Instead of paying multiple
creditors who are charging different rates at different times
of the month, you can potentially take out one big loan to
pay off all your accounts.
The biggest myth about debt consolidation loans
is that they're easy to get. While these loans may promise
a low rate and no-hassle solution, many people in debt don't
qualify for the advertised rate due to a high debt-to-income
ratio or previous late payments on their credit report.
Even if you do qualify for one of these loans,
it doesn't automatically translate to savings. Before you
sign on the dotted line, be sure that the costs of the new,
bundled loan will truly be less than what you're already paying
various creditors. For many consolidation-loan candidates,
their current credit woes mean they won't get the lowest-available
interest rate. Plus, when there is nothing to secure the loan
(such as your home), expect the lender to bump up the rate.
Understand
Home Equity Loans/Lines Of Credit »
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