Debt consolidation loans

5 Benefits of Debt consolidation loans


Considering a debt consolidation loan to pay off your credit cards or other debt? Debt consolidation loans can provide a sound financial plan to gain control of your finances and reduce monthly payments and cash outlay by getting one simple loan.

1. Financial life in order

With debt consolidation loans you can pay off any bills, credit cards, medical bill,payday loans and anything under the sun. This will definitely straighten out your financial life. You will be now left to pay one loan with much lower payments.

2. Stress Free

Having to juggle several creditors every month is a stressful situation. Just to keep remembering dates when the payments are due and not getting late takes up lot of time. Its stressful in any event.  Debt consolidation will reduce stress  most likely.

3.Improved credit scores

When several loans are paid off, you are left with lots of  credit lines which show zero balances which improves credit scores and your credit profile.

4.Creditor Harassment

With many loans gone and paid off in a debt consolidation, it will eliminate late notices, creditor calls and late fees. These days billing companies start making phone calls on the first week of the month when the payment is due. You can avoid these hassles.

5.Tax deductible loan

Most credit cards, and medical bills and others are not tax deductible. When you get a secured  real estate loan it becomes tax deductible on personal residence and interest is deductible on other properties as well.

Debt Consolidation with Secured loans

You can refinance your mortgage and get a loan which can payoff credit cards or any other higher interest rate debts. Consolidate all the debts into one single monthly payment with our home equity debt consolidation home loan! Combine first and second loans and even payoff credit cards! Once the payments are lowered they may even become tax deductible in some cases.

The savings are a doubled since credit card debt is wiped out and the new home loan becomes tax deductible. Your original payments and monthly cash outlay should be cut less than half with a typical home equity loan or a refinance second mortgage. You can get cash for any purpose. If you have equity in your home and need some cash and want to consolidate your loans, Alliance Mortgage has great programs.


If there is minimal equity in your property you can still take advantage of our 100 % home equity seconds available. There are other ways to consolidate your loans like  cash advances.  This will consolidate your loan for the short term while you look for  a debt consolidation loan  or online loans. Cash  advances is a type of loan which is not going to lower your payments but can be used to have one single payment.  These loans do not require any FICO scores.

The best debt consolidation loans  are the one you can get  with secured lenders. These loans require a minimum fico scores of 720 and six month of home ownership. These loans eliminate debts quickly, and you can improve your cash outlay each month.

Here is an example how debt consolidation can simplify things:

BILLS BALANCE PAYMENTS SAVINGS
Car Loan $10,200 $355 $0
Visa Card $ 8,700 $305 $0
Student Loan $ 4,200 $175 $0
Total $ 23,100 $835 $0
Debt Consolidation $ 23,100 $235 $600

(Payments based on 11.85 % interest APR 13.92 )

Debt consolidation loans are simple interest, fixed rate, second mortgages that can be used to pay off any type of debt, and also provides the option of receiving cash out for any purpose. The loan does not change the terms of your existing first mortgage, and minimal equity is required.

Disadvantages

The disadvantage of secured best debt consolidation loans is that it is amortized for longer term from 15 years to 30 years due in 15 years typically. It could be second mortgage of home equity line of credit or just a simple bad credit refinance with single mortgage.

Over the years there are interest payments to be made to the lender. Even though your payments are lowered , your interest cost has to be considered against the savings.  But how long most people stay in the property? Its usually 5 years of so on the average unless you car caught into the Great Recession of 2008 which makes property ownership much longer. Once the property is sold your payments stop but you had lower payments to make which you couldn't have otherwise.


 

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