Ways of Consolidating (Part II of III)
We are continuing our discussion on ways of consolidating your
debt.
A home equity line of credit can also be used as a debt
consolidation, but it is another one that has just secured your
home against an unsecured debt. You will get cash to pay off
your bills, but it comes with the same risks as a cash out
refinancing as you have put your home in jeopardy if you cannot
pay your bills. This should only be used when you are extremely
sure that you are going to be able to take care of the debt
consolidation loan, and that you are not going to end up losing
the roof over your head.
Similar to the home equity line of credit is a home equity loan.
It is very much like it, except that it is more like a loan than
a credit line. With the credit line you can use that money to
pay off your debts and then keep paying on the debt
consolidation loan. If you get to a point where you have more
money in the loan, you can use that money for something else.
With a home equity loan you are looking at a loan much like a
car loan, where it is a certain amount of money and you simply
pay it back. Like the line of credit and mortgage you can end up
with a much lower interest rate than you would have otherwise.
Next time we are going to discuss some credit card options, and
which ones might or might not be useful for your situation.
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