Debt consolidation seems to be a hot topic as of late, with the federal reserve raising the cost of money some people can be feeling the pinch.  Increased rates means higher credit card interest rates, personal loans rates, mortgage and car rates.  It also could mean inflation, which is the cost of everything growing in accordance with the value of money.  This is making the idea of debt consolidation loans a more popular (and economical) idea.  But before you decide to consolidate your debt, here are some things you should know.

 

Know Your Needs

There are basically two types of debt consolidation. One type involves getting a debt consolidation loan and using the loan to roll all your debts into one monthly payment. The other kind of debt consolidation involves choosing a company that will negotiate settlements on all your debts and then you pay them a monthly some and then distributes that money among your creditors.

Choosing between the two approaches is the first step in the process. In either case, make sure that you choose an option with a monthly payment you can afford to live with.

Get Some Help

The internet can be a great resource for comparing and educating you about the alternatives and options.  Be sure to consult various resources with good credentials online.  You can ask a professional here.

Benefits of Debt Loan Companies

Installment loans look good on your credit report. A mortgage refinance  will give you a loan at an attractive  rate, it is a great way to pay off your higher interest debt and improve your credit score, if your interested in seeing what rates are you can sign up for weekly rates here

Additionally, you only have to manage one monthly payment instead of sending out several. In some cases, you may even be able to arrange for a direct EFT withdrawal from your checking account so that you never miss a payment.

Drawbacks of Debt Loan Companies

Debt loans can be almost as difficult to be approved for as personal loans. If you have already been struggling to keep up with your debt and you have gotten behind, you may not qualify for a debt consolidation loan. In addition, if you make the mistake of taking out a loan and run your credit cards back up, you will be in double jeopardy.

A debt loan should be used to consolidate your debt, not increase it.

Get Your Options

Your options are your most important tool in this scenario.  My first recommendation would be to sit down and talk about options to see if a consolidation is your best choice.  If you are fortunate enough to have equity in your property to consolidate these debts you should consider using it.  Not everyone has this tool available to them and with interest rates still nominally low compared to that of personal loans and credit card rates, you might be overlooking a money saving benefit if you don’t explore.

As always if you have questions you can contact me via my personal information below, or apply here.

 

Thank you,

 

 

  www.mortgagegreenbaywi.com

  Get weekly ratesNewsletter | Ask a Professional

 Mortgage Programs  |  Apply Here | Reviews

 Justin Scott

Loan Officer

NMLS 878581

  1. C) 920-530-4484
  2. O) 920-490-8823
  3. F) 920-490-8967

Executive Mortgage

NMLS 271650

909 . E Walnut Street

Green Bay WI 54301