Are you in danger of losing your home to foreclosure because you simply do not have enough income left at the end of the month to stay current with your mortgage payments? Debt consolidation can allow you to keep more of your monthly income while still managing all of your existing debts, and help you avoid losing your biggest asset, your home.
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An Easier Way To Manage Your Debts
Homeowners oftentimes, for various reasons, bite off more debt that they can chew. This might be the case in your situation; or perhaps you took out a subprime mortgage and now your mortgage payments have ballooned up to unimaginable figures. By using debt consolidation to cover your other debts and allow you to make a lower payment with less interest, you can beat the sneaky banker at his own game by not losing your home.
Lower Interest With Debt Consolidation
Debt consolidation works much like a second mortgage. When you are approved for debt consolidation, your new lender will pay off the principle amount that you owe on your existing debts and loans and then you will repay them with just one monthly payment. In many cases, the debt consolidation will allow your new lender to purchase these debts for much less than what you owe, and most consolidators pass that savings on to you.
The lender for your debt consolidation will place a lien against your home until your debt consolidation is paid in full. Because of this lien, the lender feels a sense of security, and therefore writes your debt consolidation product at a much lower rate than what you are paying on your current debts now in terms of interest.
Getting Rid Of High Interest Credit Card Debt Through Debt Consolidation
The savings to be realized through debt consolidation really stack up if you include your high interest credit cards when consolidating. Credit card debt is the most costly form of credit that anyone can have, and chances are that you may be paying only the minimum monthly payment on your credit cards each month. This means that tons of interest can be added over the years, making you pay on purchases you make this year for the next fifteen to twenty years! By adding your credit cards to your debt consolidation, you will reap untold savings.
Debt consolidation is useful for many types of debt that you may have been accruing over the years. You can include not only your credit card debt, but debts like personal loans, department store credit cards, gasoline credit cards, and private student loans. (Federally guaranteed student loans such as the Perkins or Stafford loan are ineligible for debt consolidation).
Finding Your Debt Consolidation Package
There are many great options for borrowers to select from when it comes to debt consolidation. Many borrowers find that doing their debt consolidation through an online lending institution or loan servicer allows them to save even more on interest charges and get a speedy approval that allows them to get a handle on their financial situation through debt consolidation right away.