People who are having trouble paying back a number of credit card or other types of debt may consider bill consolidation as a way of getting their bills under control and eventually getting out of debt. It is much easier to only have to deal with one single payment that covers all your debt, then it is to attempt to keep up and pay four or five different creditors.
Bill consolidation allows individuals to group their debt and receive better terms. The interest rates one can obtain when they consolidate their debt is generally much cheaper. As a result, this makes monthly payments quite a bit cheaper. For individuals or families who are having problems meeting their monthly obligations, bill consolidation might be a very good idea. There are several different ways to consolidate one’s bills. In this article we will talk about how a home equity line of credit can be used to consolidate ones’ bills and help them eventually get out of debt.
A home equity bill consolidation loan has a couple of advantages. One of those being that the rates offered are generally very attractive. This is because the loan is secured with your house. The repayment terms are generally pretty good as well. You won’t have to necessarily pay the loan off in a year or two because the lender is willing to work with you. Also, you may be able to borrow as much as up to 125% of the equity in the house. So if you have poor credit but a lot of equity, then a home equity bill consolidation loan may be the right answer for you. This really helps to overcome one of the major problems of receiving a loan, and that is a bad credit report or poor credit history. Generally, you can secure a home equity bill consolidation loan even with bad credit. You simply borrow against the equity in your house, consolidate your loans, and then include the new loan into your new house payment. The problem with this is that you will now have a second mortgage and if for some reason you are not able to make the payments, then the bank or whoever owns your home, the lender, will be able to take home back your home. Therefore, you have to be very honest with yourself about how much you can afford to pay and if a home equity bill consolidation loan is in fact, the right option for you.