What’s Better for You?
 
There is a lot of talk about how to handle debt these days with some people saying that a debt consolidation loan is better than a refinancing of your mortgage and vice versa. Depending on who you talk to, you will get an entirely different viewpoint. The fact of the matter is that both loans will get you what you want, a streamlined debt repayment plan.
 
Both the debt consolidation and the refinance are secured loans, which means that if you don’t pay the loan they are going to take whatever you have offered up as collateral. If you are looking at a smaller amount for a loan, you might want to look at a debt consolidation. But if you are looking at a larger amount and have the equity in your home, you might want to look at the refinancing as you will be able to pull more out.
 
Debt consolidation is almost impossible to get these days if you have poor credit and are trying to get an unsecured loan. You must have a job, you must have great credit, and you have to want very little money – out of the loan. With a refinancing, lenders can offer you a higher percentage based on the value of the home.
 
The interest rate is something else you are going to want to look at. If you get a refinancing, the amount that you are charged is normally significantly less than what they are offering you on a debt consolidation. But check the fine print because many debt consolidation loans have a smaller early settlement penalty than a refinance does – so you might want to find out what it would be for both before moving forward.
 






 

 

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