Thinking of Consolidating?
There may be some good news for those of you who A.) own a home and B.) have been thinking of using the equity leverage of your home to help you to consolidate some high interest debts that are doing nothing to help improve your financial standing and in fact may be hurting your financial rating, known as your credit score, or FICO. What do I mean by possible high interest debts?
Well, credit cards with high interest, for one. There are also loans that are high interest and other forms of revolving debt or personal loans that are detrimentally high and would do much better for the consumer if consolidated under one roof of lower interest debt. Or of course you could consider a low apr balance transfer credit card to do the same.
The form of consolidation we are talking about here of course is a home equity loan or home equity line of credit, most of which offer a substantial benefit over higher interest revolving debts and installment loans that happen to be a high interest debt as well. Take for instance a furniture loan that you took out, which increased the percentage dramatically most likely when your introductory period was over and started charging interest, many times retroactive back to the date of purchase, once that intro period was over.
Wouldn’t it be nice to use the equity of your home to do something good for your family and your debt management, and use it to your benefit instead of paying thousands of dollars in interest to several different vendors? The other good thing now about home equity loans is that a portion of the loan is actually tax deductible, which can make this loan a lot more attractive.
Of course, there are always balance transfer credit cards if you don’t own a home which can offer an attractive alternative to those seeking to consolidate their debts.
