When you need to take a loan, for whatever purpose it may be, the thing that you first need to consider is how much of an interest are you paying for the loan. Apart from that, the other thing that you must consider is, what is the guarantee you are providing your creditor with.
Many of us are not too happy borrowing on our credit cards. The primary reason for this is the high rate of interest. If we get a better option than the credit card, then why not? We will discuss here a few options that allow you to draw loans without the aid of your credit card.
A Home Equity Loan
The home equity loan is very popular, both with the investor and the creditor. The reasons are simple. The creditor sees that his loan is secured because you are putting your most prized possession on the line. As an investor you will be happy because you will be getting generous interest rates from the creditor. On top of that some tax systems actually give you tax benefits on the interest of your loan if it is under the home equity loan.
But there are definite risks involved with such loans. You are putting your most precious possession at risk and if something goes wrong you will have to do away with your house. You wouldn't even have the option to file for bankruptcy. Therefore you should go for home equity loans only when you are doubly sure about repaying the loan according to the terms agreed to by you and the creditor.
Debt Consolidation Services
Debt Consolidation Services are profit making businesses and you will be paying them at one point of time. Although their ads might read attractive and convincing, that is just about the only thing good about these Debt Consolidation Services. They provide you loans with almost no security. Whenever they do that they would ask for a premium interest. Obviously you will be paying more interest than other options offer you. This should be reason enough for you to stay out of the Debt Consolidation Services and look elsewhere.
A Retirement Loan
If you are far from retirement, doing well in your job and reasonably in good health, then you can always draw a loan from your retirement account. The interest you pay is low. And the best thing about it is that you lend yourself money and you pay the interest also to you.
