Debt ReliefIf you are up to your neck
in debt, there may seem like there is no relief in sight. In
fact this is not necessarily the truth. There are ways to take
all of your stifling bills and roll them up into one neat
package by using debt consolidation in two very popular forms
Home Equity Loans, Refinancing Loans, and a Consolidation Credit
Card. All of these instruments provide the debtor with one thing
“relief” from the current debt by shrinking it down to a single
manageable debt.
Using home equity to consolidate debts
One of the popular methods of debt consolidation today is the
Home Equity Loan. What happens is that the debt is extinguished
using the equity from a homeowner’s home. A loan is created
outside of the mortgage in order to satisfy the debts. Should
the homeowner default on the loan, their house is in jeopardy of
being foreclosed upon if that loan is not satisfied with a
specified amount of time.
Refinancing loans
People often consume the debt by rolling it into a new
mortgage. This way the house costs more money to the borrower,
but the debt is extinguished at close and the debt is neatly
rolled away into the mortgage securely. Upon settlement of the
loan, the debts are paid in full and satisfied. The clock on the
mortgage is reset to day one.
Credit card consolidation
A low interest credit card is offered to the borrower to
include any outstanding credit and loan balances. The interest
rate is a low fixed rate for a period of up to one year, upon
the year’s end it will resume at its normal rate. Upon
acceptance and terms the account should be closed once paid in
full and payments be made directly to the new credit card
provider. Some people have been able to master paying off one
credit card with another to keep the debt revolving and interest
rates low. Some people fail to close out the previous creditors
account and run them back up again as well.
All three of these options provide solid debt relief and help them reconstruct and manage their debt better.
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