Bad
Credit Debt Consolidation Loans - Getting A Debt Consolidation Loan, Even
With Poor Credit
By
Carrie Reeder
An
online debt consolidation loan allows even people with a poor credit to
reduce their overall monthly payments and regain their financial footing.
While there are personal loans that allow you to do this, tapping into
your home's equity is a better option.
Choosing
A Loan
Refinancing
your home to access your home's equity enables you to pay off your short-term
debt and write off the interest on your taxes. A line of credit won't
let you do that.
With
bad credit, your interest rates will be slightly higher than a traditional
mortgage, but they will be lower than a line of credit. You also have
the option to refinance your loan in two years, after you have established
a good credit record.
Applying
To Online Lenders
Online
mortgage lenders offer financing to all sorts of credit situations, including
those with bankruptcy or a foreclosure in their records. Before you begin
the process, take the time to research refinance options by different
lenders. Compare rates and terms to find the best fit for your situation
by requesting quotes.
One
you have picked a lender, go ahead and apply online for the deepest discounts.
Usually a lender will reduce fees or interest rates for online applications.
Unlike a regular mortgage, your home equity loan will take some time to
approve since the lender has to verify the value of your home.
If
you believe the listed price of your home is undervalued, request an appraisal.
With today's hot real estate market, home values are rising between 5%
and 50% a year.
Plan
To Refinance In The Future
When
you have received your home equity loan, make plans to refinance again
in two years. In those two years, you can build your credit score to good
by making regular payments on all your bills. You can also raise your
score by closing credit card accounts with lenders.
If
your lender doesn't automatically refinance your loan, approach them with
a request for a quote to refinance. Typically, your lender will give you
a better than market rate. However, you still should compare quotes of
other lenders to see if you can find a better finance deal.
About
the Author: Carrie Reeder is the owner of http://www.abcloanguide.com,
an informational website about various types of loans. To view our list
of recommended debt consolidation companies online, visit this page: http://www.abcloanguide.com/debtconsolidation.shtml
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