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Consolidation Loan Alternatives
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Debt Consolidation Loans
A debt consolidation loan can be a good idea, but you should make sure that you are making the right decision before you get one. If you aren't well informed about the risks of a debt consolidation loan, it could be trouble. Here is what you need to know.
Over the Edge
Many people get debt consolidation loans and don't change their spending behavior. They get rid of credit card, installment and other types of debt through the use of a debt consolidation loan, but then continue to get new debt. Now they have to make payments on all types of new debt and a consolidation loan. This can push you over the financial edge.
If you have money control issues, a debt consolidation loan is not going to help unless you change your spending habits. If you already know you have money control issues, talk with a financial recovery counselor. They can help you to overcome your negative money habits.
Conversion
When you get a secured debt consolidation loan (home equity loan), you convert debt that was unsecured into debt that is secured by your home. If you default on your loan payments, you could lose your house. When you get a home equity debt consolidation loan, your lender asks that you pledge your house as collateral. The only reason they do this is so they can foreclose on your home if you fail to makes the payments.
So while the debt consolidation loan might have a lower monthly payment, there is a hidden cost of placing your home at risk if you don't change your financial management skills.
The Hook
When you get a secured debt consolidation loan, you might think you are getting a wonderful new tax break. However, the interest you pay may not be tax deductible. According to the IRS, if the interest paid on a home equity loan is more than the market value of your home, and you use the loan to repay unsecured consumer debt, the interest is NOT deductible!
More Answers and Solutions
If you are thinking of getting a debt consolidation loan because you are having financial problems, we can help. Our AllPaid Plus sm Program helps you get control of your debt without the same dangers of a debt consolidation loan.
If you are having a financial crisis and think a debt consolidation loan will solve your problems, you could be dead wrong. Our Crisis Relief Team ® can create a smart plan of attack for you to eliminate your problem.
Free Publication
Myvesta.org has prepared a downloadable publication to help you figure it all out. Visit our publications area and download "How Should I Borrow" under our money management section.
We invite you to contact us for a free Debt Consolidation loan evaluation so we can help you take control of your finances and reestablish your good credit if necessary.
Use a debt consolidation loan to pay off
- Credit cards with high interest rates
- Store cards with high interest rates
- Accounts that are behind on payments
- Car loans
- Boat loans
- Student loans
- Furniture loans
- Small Loans
- Personal loans
- home improvement loans
- judgements or tax liens
Use debt consolidation loans to consolidate bills and loans, pay off credit cards and other high interest debt into one payment. Home Financing is the least expensive way to consolidate debt and pay off credit cards and other high interest loans. Debt consolidation loans carry lower rates, credit cards have high interest rates that are not tax deductible. Debt consolidation loans offer home owners a method of Home Financing that will pay off credit cards and other loans. Get a debt consolidation loan and pay off credit cards to improve your financial situation.
We can help you with debt consolidation loans , mortgage financing, paying off credit cards and other loans with debt consolidation loans. We pay off your credit cards, pool loans, second mortgages, personal loans, other debt consolidation loans, first mortgage financing, and any other bills or debts you want to consolidate.
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Note: Texas Home Equity Loan Laws prohibit certain types of loans, ask a representative for details.