Do you have rising credit card debt, or a couple of cards with high interest rates that you never seem to get paid off? You may be a good candidate for a consolidation loan. The idea of a consolidation loan is quite simple; borrow an amount of money that will pay off a variety of other loans with higher interest rates than the new loan. Here’s why you should consider a consolidation loan if you are having trouble paying off other debt.
Monthly payments may be less — Some of your existing loans or credit lines may have relatively short payout times, requiring a more hefty monthly payment. A consolidation loan may offer a longer payout, allowing you to budget a lower payment each month.
Consolidation loans can cover a wide range of other loans — You can use consolidation loans to simplify payments for credit cards, car loans, medical bills, and so forth. The only loan you shouldn’t consolidate is your mortgage; if you are having difficulty paying your mortgage, talk with your Investor. There may be mortgage refinancing opportunities that would not be best suited for consolidation.
Some cash advances can help consolidate debt — Your bank or credit union may offer you a cash loan to pay off other debt, if you have a good credit rating. Some credit cards also offer cash loans to their good credit customers, but look for cash advances that have a zero percent interest rate for some period of time. Work out how to pay back the cash loan before the interest rate kicks in, because these loans can have higher interest rates attached to them.
Use the equity in your home — Home equity can be a valuable source of cash, using a direct equity loan or an equity line of credit. A loan will supply you cash to pay off your other debts. A line of credit is a maximum amount of credit at a specific interest rate based on your equity. If you don’t use it, you normally pay nothing. The payments start when you borrow against the line of credit using the equity in your home. These loans are secured because they are linked to your home’s equity, so make sure you have the income to make regular payments to avoid losing your home. Check with your Hard Money Investor for specifics on what credit rating and amount of equity will qualify you for these loans.
Reverse mortgages — These may be available for persons older than 62, and involve a mortgage that pay you a monthly amount as long as you remain in the home. Keep in mind that these reduce the equity over time, so they are not advised if you plan to use the home in estate planning for your children or other family members. Also carefully check what fees and interest rates apply, as they can be high if you aren’t careful.
Debt consolidation services — These are companies that in essence buy your debt, and make the payments for you. This means you pay them, and they pay off your other creditors. It removes the stress of having to deal with creditors, but you often have to pay the service an up-front fee and interest rates may not be that attractive. Paying over a longer period will make the effective amount you have paid much higher over the life of a long-term loan.
AHL Hard Money Loans uses a group of investors that are looking to invest in your loan needs. We make all the arrangements, and the advantage is that you can have your money much quicker than with any conventional loan. We will review your credit and income, and we secure the investment using the equity in your home, so you will need to have that information available before starting the process with us. Feel free to call us at (813) 368-9919. We are Florida’s resource for hard money loans, and would be happy to answer your questions about how to get a consolidation loan from AHL Hard Money Loans.