Compare_Debt Consolidation Loans So You Know Where Your Money Goes
Compare_debt consolidation loans before you make a commitment and you can tell from the previous example that you will be closer to being debt free. But take the necessary precaution and make sure you plan carefully and follow it up with the discipline to stick to the terms. Here are the steps to consider:
Step 1: Determine how much you owe and make a list of the items, how much you owe, the interest rate and the monthly payment you pay for each. Here's an example of how the debt will look like after you add all the amounts owed and the monthly payments:
Total Amount of Debts
Store Credit Card
Bank Credit Card
Excluding the mortgage, the total debt load is $20,633.00 and the total monthly payment is $539. With such high interest, your debt is not going down fast enough so you think of other ways to handle your financial situation better. Let's take for granted that both the store and the bank allowed you to pay only 2% monthly of the debt. Now you know how much you owe and pay each month.
Step 2: Look for the best loan. Consider the different types that may be available for you and compare_debt consolidation loans.
The first types are the lines of credit and home equity loans. They have the lowest interest rate because they are secured. Another advantage of this is that due to the fact that this is a type of mortgage, the interest may be deductible. Say you'll take a home equity loan of $20633 to cover your debts. With a low interest rate of 7.5% or lower, your monthly payment will be less than what you are currently paying.
The second type of loan could be a personal loan if you do not want your house to secure the loan or if you don't own a home. The interest rate will be a little higher, perhaps at 10%. Paying a loan monthly at the current amount you now pay will make your loan disappear and you will be debt free.
The third type is a cash-out refinancing which entails taking a new mortgage on your home larger than what you have now. If you have a $60,000 mortgage and your home is now worth more than $120,000, you could take out a new mortgage with an additional $20633 and use that to pay off the loans. Your monthly mortgage payment will be a little more but less than the combined mortgage payment and the payments for the other debts before taking this larger mortgage.
Talk to several companies and write down for each type how much it will cost you. Don't forget to add the upfront fees and everything else. Ask how much the annual percentage is for each type of loan as this will make it easier to compare_debt consolidation loans.
Compare Debt Consolidation Loans, Dangers of a Quick Fix
Compare debt consolidation loans so you won't get into the danger zone. Remember that this quick fix may not cure the problem for the relief is just symptomatic unless you study the pros and cons of each type carefully and stick to the terms to the letter.
You see 70% who go this route end up in the same predicament in two years. But if there is no other solution this can help despite the risk as long as you are sure you will be disciplined to follow the terms till the end.
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