We all have debt, and chances are, we all want to get rid of it – especially the high interest debt that isn’t tax deductible. Generally, there are two ways to consolidate your debt: by refinancing your existing mortgage and using your equity to consolidate debts, or by taking out a second mortgage or home equity.
REASONS TO CONSOLIDATE YOUR DEBT:
- Your monthly payments are too high
- You can only pay the minimum balances
- You need to save for retirement or your child’s education
- Your student loans are no longer tax deductible
- You have cash flow issues
- You have to write too many checks to too many different parties
TYPES OF DEBT TO CONSIDER CONSOLIDATING:
- Credit cards
- Car loans
- Student Loans
- Tax liens
- Business loans
- Existing home equity loans
HOW TO DRAMATICALLY REDUCE YOUR CREDIT CARD DEBT:
Half of all adult Americans have credit card debt equal to or greater than six months of their annual income. If a borrower makes only the minimum monthly payment on their cards, it could take them almost 24 years to pay them off!
One strategy for reducing credit card debt is to pay more each month, generally around $100. This extra payment typically cuts the payback time by up to one third.
Another solution to this problem, however, is a debt consolidation loan. These loans come in many shapes and sizes and the interest rate is determined by credit scores and the amount of equity available in your home. Rates are typically far lower than your average credit card rate and they are repaid over a longer period of time. With a debt consolidation loan, it’s not uncommon for borrowers to save more $1,000 per month.
Contact Us and we can help you find which option might be best for you!