Consolidation Loan Products. How The Right Consolidation Loan Can Help Improve You Financial Situation.
When hard financial times are upon us, many people are forced by loss of employment or other hardships to fall into a situation of carrying disturbingly large debts. People with bad credit usually owe to multiple creditors for multiple expenses such as mortgages, credit card balances, school loans, and auto loans.
Credit-yogi.com understands that it is almost always a good idea to end the confusion of multiple creditors with varying terms and interest rates by seeking some form of debt consolidation. This will allow you to pay off existing creditors and focus on one bill that will be much less than the sum of all the individual bills. Be aware that there is more than one way to address this issue.
Don’t assume that a debt consolidation loan is the only loan option for people with bad credit. Credit-yogi offers several financial products that can get you out of debt, and which one you choose will be particular to your personal situation. Make sure that you research them all to get the one that is best for you.
Homeowners have some options that non-homeowners do not.
The homeowner may want to look into three different types of loans. Mortgage refinancing (or cash-out consolidation refinance), second mortgages, and home equity loans are usually easier to get than a personal bank loan since there is a tangible asset, the home, to secure the loan. Usually, the most flexible are home equity loans.
They are taken against a proven tangible commodity, the equity built up in the home. The money released from the home equity can be used for anything. The problem lies in this flexibility, however. There will be a complicated list of options concerning variable or fixed interest rates and effects on a primary or secondary mortgage. They can also be structured as a line of credit against the home equity. The very flexibility of a home equity loan means you will have many important decisions to make.
Mortgage refinancing and second mortgages may be more straightforward. For these, you must evaluate the current interest rates and terms that you can get, and carefully calculate whether or not you will actually be saving money in the long run. There is even a chance that you can incorporate credit debts and other debts into the new mortgage (if you get a good enough rate to make that worthwhile). In recent times, lenders have begun to frown on second mortgages, making them more difficult to get.
Unsecured loan options
If you do not have a house to secure a loan, do not despair. You may want to be looking at private debt consolidation loans and personal loans. These are fundamentally the same thing but differ in that a debt consolidation loan is worked through a bank or debt services company while a private loan is worked by you personally.
They also differ in that a debt consolidation loan declares intention on your part to pay off debts, while a personal loan is, well, personal. Of course, your credit rating will have a great effect on your ability to secure such a loan. As always, shop for the best credit terms and carefully calculate whether or not you will actually be saving money in the long run. As a rule of thumb, without collateral the requirement for a better credit score tends to increase.
You may want to consult with a debt services company for free initial consultation for further options. As with any firm, credit-yogi would like you to always remember that they are giving you advice not instructions, and all final decisions rest with you.
The options may seem bewildering, but the benefits are high if you can successfully find out how each of the loans for bad credit would or would not benefit you. Only you really know your unique personal situation, and you have to choose the option that you feel works best for you.