A Home Equity Loan can Help with Your Credit Card Debt Consolidation

November 23rd, 2009 | by admin |

National surveys reveal that most average family’s in America holds a credit card balance of over and around $8000. Since finance fees are high most of these households find it difficult if not absolutely impossible to cut down their debts. Solution? Well for starters there is bankruptcy, and it is the most convenient way out, but there remains a few other options.

Plus points of a Debt Consolidation loan

Unlike what most people seem to believe Debt Consolidation Loans do not have mythical powers which can resolve your debt problems at the snap of a finger. What it does have however is the potential to prove a means of reducing your debts promptly.

How is that? Well it’s fairly simple really, your credit card demands high finance fees, therefore their balances are difficult to pay off. Usually, their minimum payments do not include the finance charges, this makes it difficult for the consumer that is you, to in any way bring down their credit card balance.

Once you get yourself a debt consolidation loan you can dump all your credit balances under the same loan, without having to pay an exorbitant amount of interest! Which in its turn means that you can get rid of your debt altogether in as little as a few years.

Home Equity Loan: as a means of reducing your debts

Who is qualified to get a debt consolidation loan? Pretty much anyone with a decent credit. If you already own a home, even better.

A home equity loan may prove beneficial for you in case you are struggling with debts. This is because they are low on interest and fixed in terms of conditions. A home equity loan can therefore be paid off in as little time as 5- 7 years, if not sooner.

Once you have a home equity loan you can use it as your collateral. Suppose the equity for your home is around $7000, you can easily expect to acquire around that much as a loan. This money can be used by your for anything, paying off credit card debts however seems to the be the most popular purpose of use.

Disadvantages of Home Equity Loan

Well agreed that they are rather handy, but Home Equity Loans do not come without their own problems, to steer clear of these remember to use the money well and borrow only as much as you can definitely pay back. Don’t let it add another expense to your already draining costs. If you fail to repay your home equity loan it will result in foreclosure.

Gibran Selman
http://www.articlesbase.com/non-fiction-articles/a-home-equity-loan-can-help-with-your-credit-card-debt-consolidation-65265.html

  1. 7 Responses to “A Home Equity Loan can Help with Your Credit Card Debt Consolidation”

  2. By legacygt48@sbcglobal.net on Nov 23, 2009 | Reply

    I am 25,000 in credit card debt. I own my home (no equity) – need help with loan advice or debt consolidation?
    I have been transferring balances and making payments but I would like to know if there are any viable loan options to turn it into one payment without killing my credit score. Any help would be appreciated.

  3. By Mustafa Leek on Nov 23, 2009 | Reply

    National Debtline
    0808 808 4000

    They’d be far better answering than me.
    References :
    Going bankrupt.

  4. By SOFIYA on Nov 23, 2009 | Reply

    WATCH OUT FOR LOAN CONSOLIDATION COMPANIES, They want to make a profit too.

    Check to see if you have any non-profit agencies that can dispense financial advice, consumer advocacy organizations in your area. Another loan sounds like a cluster-concentrate on your present situation. Remember, EVERY time you make a loan or credit application, they pull your records, and YOUR CREDIT RATING DROPS.
    Paper-bag it to work, avoid Starbucks & such, shop coupons on-line, bike or walk to work, only buy on sales [hey, have a garage sale] barter where possible, don’t eat out. Just bite the bullit. Low in calories, too!
    References :

  5. By Mrs HarleyBrat on Nov 23, 2009 | Reply

    Using even a credit debt consolidation will effect your credit score (you wont’ be able to get around that) Try calling every credit card (and stop using them) and ask each creditor to start taking half the monthly payment (but shred the cards) and if they won’t – check with your local social services office. They’d be more apt to refer you to a reputable debt consolidation company in your area. Good Luck
    References :

  6. By Choqs on Nov 23, 2009 | Reply

    I don’t understand how you own a home but say you have no equity–of course you do. Do you still have a mortgage? My hubby got us in this situation years ago, we were actually seperated at the time. When I came back it was to find that he owed money to a bunch of lenders who were charging outrageous interest.
    We went to the bank that holds our mortgage and they were more than happy to consolidate all the loans and even asked why we had not come to them first. Good question. The interest at the bank was 10% lower than what my guy had been paying.
    Happy to say we are out of debt and the house will be paid for in 3 years, yeah!
    References :

  7. By efflandt on Nov 23, 2009 | Reply

    I have been there. It sort of sneaked up on me over several years due to a car I could not really afford and not noticing it was 25,000 until I added up all the cards. I was in an apartment I hated and when I looked at what I would need to save for retirement, it was quite depressing. I got an offer for a personal line of credit from my bank, and they did give it to me, but it had a $500 limit and $25 annual fee. I told them to forget it and closed the account.

    But I had the assets to cover it. I sold my woods in northern WI for $10,000 (easement issue), inherited $10,000 from my grandmother, paid off the rest. That allowed me to keep my SW WI woods. Fast forward 10 years, I bought a home in 2002, paid $14,000 cash for a 2001 vehicle in 2004, refi’d my home down to 20 yrs fixed in 2005, contribute 22% to my 401(k) and trying to contribute to Roth IRA when I can. I still have that car I could not afford (95 Maxima SE 5-spd) and it still runs great.

    So there may be a light at the end of the tunnel, but will take effort and sacrifices to get there.
    References :

  8. By L*star* on Nov 23, 2009 | Reply

    How do you not have any equity in your home? Do you have out other mortgages against the property? If not then going to your mortgage company would be your best bet.
    References :

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