By getting people the loans they need, I can help them reach some financial security. My loans help people by new cars, extend their house and consolidate expensive debts. Once they get their money issues under control they start to do better in all aspects of their life, they have better relationships and start doing better at work. It's great to be the catalyst for positive change in my clients life. If you are also in the financing industry or a client wanting to understand how financing works, please read on. This site is an exploration of how we decide who to lend to and how much we can lend them.
Are collection agencies or creditors calling you every now and then because of an outstanding debt? If so, consider using home loans to pay of a few debts at once. If you're interested, there are two types of home loans that you may use to consolidate your debts. Learn about them below.
What is debt consolidation?
This is a process that enables a borrower to repay multiple debts, using a single monthly payment. To achieve this, you have to take a single loan and use it to pay off all your outstanding debts at once. By so doing, the various debts that you had before are replaced by a single debt, for which you need to make a single repayment every month. Instead of taking a personal (consolidation) loan, you should consider taking a secured (home loan) to consolidate your debts.
How can home loans consolidate debts?
Basically, there are two types of home loans that you may use to consolidate your debts. Learn how you can use them to pay off all your outstanding loans.
1. Cash-out refinance loan
After taking this type of loan, you replace your existing mortgage with a new loan of a higher value than the outstanding balance of your home loan. You can then use the remaining money to pay off other debts, such as store card bills, credit card bills or medical bills, at once. The benefit of this loan is that you use the same security (your home) to secure a new loan. Before applying for this type of loan, you should first calculate the outstanding debt and ensure that the amount that will remain is enough to pay off your outstanding debts.
2. Second mortgage loan
The other option to settle your outstanding dues is to take a second mortgage loan. If you have sufficient equity in the property, you may use it to take a second loan and use it to pay off your outstanding debts. In this regard, you can either opt for the one-time home equity loan or apply for the one-time home equity loan. The second option allows you to borrow the required amount from time to time, until you hit the credit limit.
While applying for a home loan to consolidate your debts, it is advisable to be very careful. This is mainly because you can easily lose your home. You should talk to home loan professionals to learn more about the process, and which loan will help you to fight off debt.