| 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. |
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