Bad Credit Repair - How to Improve Your Credit Score
Description: If you are drowning in credit card debt or other debt, perhaps a debt consolidation loan is the answer. The options vary from a home equity loan or refinancing home loan to a secured or unsecured loan. Learn what questions to ask before signing.
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Sometimes a loan consolidation is the best way to get rid of credit card debt or other types of debt. Don't just jump in and apply for a loan without considering the different options and the ramifications of each of them. Consider these options.
One option for those with equity in their home is refinancing your mortgage for more than you owe and using the extra cash to pay off debt. You can get pretty low interest rates this way - usually, but not always, lower than the interest rate on a home equity loan. However, when you are stretching out payments over 15 or 30 years, the total cost of the interest over the 30 years on a refinance mortgage can wind up being quite a bit. Be sure to do your homework.
Two advantages of taking out a home loan are that they have fairly low interest rates and the interest you do pay is tax deductible. With a typical (normally no more than 80% of the equity in your home), you borrow money against the equity and repay it over a fixed term. Be aware, however, that a home equity loan requires you to use your home as collateral for the loan. In other words, if you cannot make your payments, your lender can foreclose on your home. Also, you may have to pay closing costs, points o
Bad Credit Repair - How to Improve Your Credit Score