Secured Debt Consolidation

May 22, 2010

Secured Loan Debt Consolidation

By admin

Secured loans make your creditors feel more secure about loaning you money. When someone takes out a secured loan, that simply means there is collateral to back up the money they borrowed. This could be a car, or more commonly, a house. There are pros and cons to getting a secured loan as opposed to a standard loan for debt consolidation.

Home Equity Line of Credit - Perhaps one of the most common secured loans is the home equity line of credit. This loan amount is based on how much equity you have in your home. Once you take out this type of secured loan, your house becomes collateral. The most positive aspect of a secured home equity loan is that the money you borrow is tax deductible. For instance, if you have $5,000 in credit card debt, you can roll that over into a home equity line of credit. The credit card payments are not tax deductible, but the home equity loan is. In contrast, standard debt consolidation loans are not tax deductible.

Interest Rate Advantages - Another advantage of using a secured loan for debt consolidation is the interest rate. For many people, credit cards are the source of their debt problems. Credit cards have enormous interest rates. Since secured loans are “secured” by collateral, they tend to have significantly lower interest rates.

After discussing the pros, it is important to understand the con of using a secured debt consolidation loan. Again, many people use a house or a car to secure these types of loans. If you happen to default on the loan and cannot make payments, your house or car will be in jeopardy. A house is usually the largest asset someone owns. You do not want to put your most valuable asset at risk.

For some people, debt consolidation is the best option for their financial problems. Be sure to carefully weigh the pros and cons before choosing to use a secured loan for your debt consolidation. For more articles like this, bookmark www.SecuredDebtConsolidation.info

Author: Carrie Reeder

Topics: General, How Do I Obtain a Secured Debt Consolidation Loan | No Comments »

July 29, 2009

Secured Debt Consolidation and Secured vs. Unsecured Loans

By admin

Secured Debt Consolidation is one way to consolidate your debts and begin to focus on your financial future.  To weigh all of your options, consult with a financial planning professional who can assist you in crunching all of the numbers to make sure that you make the right decision for you, and your family.

There is seldom a bad intention behind the give and take of security; it all boils down to the protection of one’s own interest. So, in order for everyone to live in peace, let us see what equilibrium the market has in these matters.

Secured Loans

As we know, a secured loan is backed by some valuable provided by the borrower, typically a property. There is certain compensation in the way of conditions that are conveniently regulated by the government and nowadays the borrowers, usually in inferior negotiating conditions, are never left to their own luck or negotiating ability.

So, if a borrower provides a security, the law says that he is entitled to better conditions. These may be translated into lower interest rates and/or longer payback terms.

On The Other Hand

An unsecured loan will give peace to the borrower, since his property will not be affected, meaning it will not be used as a collateral or guarantee for the loan. As a counterpart, the lender will have a greater risk of not being able to recover his money, so he will ask for compensation, so to speak, namely a higher interest rate and a shorter payback term.

Other Differences

There are other differences that call for further study, when evaluating which type of loan to apply for. Such is the case of the fees that correspond to a secured loan. They are appraisal fees, home insurance in some cases and much more paperwork than for an unsecured loan.

Every Rose Has Thorns

When applying for an unsecured loan, the requirements are stiffer, meaning that the loan will be granted after a thorough evaluation of the borrower’s job status, credit ratings and banking status. Naturally a good, steady job with a long seniority will give a greater chance of qualifying for a loan than someone who is barely making ends meet and has been at his job for only six months, even if credit ratings are within the normal score.

Even A Secured Loan

As said above, a secured loan will give better conditions to the borrower, but even these have to be well planned, meaning the borrower will have to evaluate his or her situation with the greatest honesty. It is always better to apply for a longer term with easier payments. Then, if you wish to shorten the payback period, you can make extra payments if these are allowed or refinance the loan towards a shorter term.

Refinancing has fees and they have to be measured against the savings posed by the shorter term, but this kind of dilemma is always much easier to solve and lighter on the future than facing delinquency or foreclosure due to default.

One Major Recommendation

Never act on impulse or if you are not sure of what you must do. Nothing is as urgent as your security. There is always someone you can take advice from, always someone willing to help and always sources of information that will give you an unbiased opinion for your benefit.

Article Source: http://EzineArticles.com/?expert=Jess_Peterson

Topics: Consolidation Information, Secured Debt Consolidation, Secured Debt Consolidation Pros and Cons, Secured Loan vs Unsecured Loan, What is a Secured Debt Consolidation Loan | No Comments »

July 15, 2009

Secured Debt Consolidation and Be Aware of Secured Debt Loans

By admin

Secured debt consolidation can help consumers get their debt under control, in one payment, possibly with a lower interest rate and free up income to move on with their financial future.  However, consumers need to be aware that secured debt loans have their drawbacks as well, and ensure that they weigh those “cons” along with the “pros”.

First of all, if you get a secured loan with your home or home equity as collateral, you ”tie up” your home equity.   So, if you are looking to sell your home in the near future, you will have to pay off the debt consolidation loan with the equity that you could have applied toward the purchase of your next home.  And, if housing values continue to deteriorate, you could find yourself upside down on your home, depending upon the level of equity you have and  borrow against.

Also, while many secured debt consolidation loans offer you a lower monthly interest rate than many of the credit cards that you are paying off, if the terms of the loan are over several years, you may end up paying even more interest!  Yes, it is possible, and consumers often lose track of that reality when they are looking for the “instant gratification” of getting out from under their debt, feeling relieved with one, easy payment and even getting creditors off of their backs.  Ensure that you work the numbers, or have a financial planning professional crunch the numbers for you. 

Another critical point is that you HAVE to change your spending habits, how you budget for day in and day out life (not to mention the big purchase!) and dramatically change the way you look at material items.  If you do not, you will find yourself with the same heartache and headache in the future.  The bottom line is that you have to look deep within and possibly admit that you have a spending problem and are less than responsible with your credit card use.  Change those habits NOW and you will find a more secure financial future.

Understandably, not all consumers are in debt due to their spending habits.  Loss of a job, pay cuts, medical bills and more can also cause serious financial concerns for many of us. 

And, the most serious point of this entire article?  If you are unable to make your loan payments, you risk losing your home.   This is a very sobering thought, one that needs to be weighed the greatest. 

Your best bet is to discuss your financial situation with a financial professional, even if you are fairly savvy with your finances and have simply fallen into a tough spot, you need to know the potential pitfalls to dealing with your debt with a secured loan.

Topics: Consolidation Information, Consolidation Updates, How Do I Obtain a Secured Debt Consolidation Loan, Secured Debt Consolidation, Secured Debt Consolidation Pros and Cons, Secured Loan vs Unsecured Loan, What is Consolidation, What is a Secured Debt Consolidation Loan | No Comments »

July 5, 2009

Secured Debt Consolidation and Weighing All of Your Options

By admin

Secured debt consolidation is certainly one way out of debt and getting your financial future under control.  You should evaluate and weigh all of your options, however, to ensure that you are making the right decision for your amount of debt, what you are able to finance, and how you want to deal with your credit and other variables.  Here are some of the options  that may be available to you:

First and Foremost, Negotiate With Your Creditors:

Consumers often feel powerless in the face of their debt woes and credit issues.  We can feel that the credit card companies are huge, faceless corporations that only want our payments, and our payments on time.  While that can be somewhat true, you may be surprised by how willing some of your creditors may be to offer you a lower interest rate, or waive fees, such as late fees,  associated with your accounts.  You have to take the step and ASK.  I eliminated a yearly charge that American Express charged me for my account in this manner, saving me about $300.00 alone! 

Debt Management Plans:

You may need to work with a credit counseling debt management service.   In this option, you will be set up with a debt management plan, and you will need to deposit money to set up an account and the debt management service will pay your bills for you.  Here again, this debt management company may be able to communicate with your creditors to get your debt reduced, or lower your interest rates.  Typically, too, your debt is paid off in a relative short period of time, so you can be financially sound in a matter of a few years.

Work with a “Traditional” Lender:

Instead of dealing with credit counseling organizations and setting up debt consolidation services, you may be able to go a traditional route and obtain a loan through a lender.  There are basically two kinds of loans that can assist you wtih your debt consolidation needs, a Secured Loan or an Unsecured Loan.   What are the differences in these kinds of loans?

Secured Loans:

With a secured loan, you may be able to use your home, or other major assets like property, as collateral for a secured loan.  If you have equity in your home, you may be able to get an home equity loan to pay off your debts, or refinancing debt consolidation may be possible by refinancing your home.   With interest rates as competitive as they currently are, you may be able to save a great deal of money by consolidating your debt into one payment with a much lower interest  rate.

Unsecured Loans:

Unsecured loans, or personal loans, are also a possibility even in this tight and tough credit market.  Typically, you have to have pretty good credit scores and prove steady employment in order to obtain an unsecured loan.    Questions about your credit score and credit worthiness?  Get FICO Score Watch Now!  or What’s your Credit Score? A good credit score is 775+ and can save you money. See yours now - $0. 

And finally, and last resource, Bankruptcy:

Your last resource and option is to file personal bankruptcy.   Why last resource?  Bankruptcy is a very serious legal and financial decision, with ripple effects on your credit score, ability to obtain  employment in some industries and ability to obtain loans for about a decade.  If you are considering bankruptcy, contact a personal bankruptcy attorney in your area to obtain legal counsel.

Again, there are options for dealing with your debt and debt consolidation needs.  You are not alone in this, and there are a variety of professionals and organizations that are available to answer your questions and assist you with securing the right option.

Topics: Consolidation Information, Consolidation vs Bankruptcy, Secured Debt Consolidation, Secured Loan vs Unsecured Loan, What is Consolidation | No Comments »

June 24, 2009

Secured Debt Consolidation Process

By admin

Secured debt consolidation is possible, depending upon how much debt you have and the collateral that you are willing and able to put up to secure the loan.  Discuss all of your debt consolidation options with a financial planner, banker or other trusted financial professional.  Loans for debt consolidation can come in a variety of forms, do the research to make sure that you get the right one to address your financial needs.

The average person juggles numerous bills each month–credit cards, auto loans, personal loans and more! If you’re getting buried beneath paperwork, you may want to consider a debt consolidation loan. Instead of dealing with multiple creditors, you’ll only have to pay one bill each month. And you can get a debt consolidation loan–even if your credit is not-so-perfect–if you secure it with some type of collateral. Here’s how to get approved:

1. Decide on your collateral

Whatever item you choose as collateral for your loan should be one you’re willing to risk, since the lender could take it if you can’t make your monthly payments. One of the least expensive options would be your home, since you could get a home equity loan, a home equity line of credit or a second mortgage. If you’re not willing to risk your house, you could also use an automobile or a boat. Some lenders will accept stocks or bonds, or even expensive belongings such as jewelry or electronics.

2. Find a lender

You’ll need to find a lender that accepts the type of collateral you’re using to secure your loan. Most major lenders and banks offer home equity loans, and many offer personal loans secured with a vehicle or boat. You may have to dig a little deeper to find a lender that will accept jewelry or other belongings as collateral. Check with your local banks and credit unions, and do a search online to find an appropriate lender.

3. Compare loan rates and terms

Before you sign up with any lender, make sure you compare their rates and terms with similar loans. Some unscrupulous predatory lenders may try to take advantage of your situation by charging you a high interest rate or extra fees. It’s always best to compare at least two loans to ensure that you’re getting the best possible rate.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder

Topics: Consolidation Information, How Do I Obtain a Secured Debt Consolidation Loan, Secured Debt Consolidation, What is a Secured Debt Consolidation Loan | No Comments »

May 17, 2009

Secured Debt Consolidation and Looking at Secured Debt Consolidation Loans

By admin

Many consumers overwhelmed by their debt and credit card payments are searching for solutions.  One such solution can be a secured debt consolidation loan.  With that option in mind, typically the security is your home or property and it can be a challenge to find lenders in this challenging credit market.  Furthermore, you truly need to have a plan that will ensure that once you obtain this secured loan to consolidate and pay off your debts, how will you manage your money and credit card to never again find yourself in this critical financial situation?  You can also discuss your debt consolidation options with a financial planner. 

Overwhelmed by all of your debts? Getting behind on payments, because the payments fall throughout the month instead of at the same time? Feel like you’re not making a dent, at all, in your debts? You should consider a secured debt consolidation loan. The lender takes all of your debt and puts it into one- just one payment per month, for all of your debt. Less mess, less headache trying to sort through all of your bills. How does a secured debt consolidation work?

Since it’s a secured loan, it’s based on being a homeowner. Your house or property is put up as collateral, which is a sort of guarantee to the lender. They take less risk in lending to you, because if you refuse to repay them, they take possession of your house or property. The positive aspect of a secured loan is that the interest rates are much lower. This is good for you as the borrower, especially if you have a lot of debts that have high interest rates. Consolidating them could save you a lot of money in the long run.

You can go through banks or the internet to find a lender that will give you a secured debt consolidation loan. It’s important to prepare your own financial picture before you start getting quotes. Add up all of your debts, your earnings minus your spending, all of your interest divided by the number of your debts and contact your creditors, letting them know you’re in a bit of trouble with payments. This will give you a general idea of where you stand, and some creditors have repayment help available. After you’ve crunched your numbers, then get quotes or advice from lenders who specialize in secured debt consolidation loans.

When you’re doing your comparison shopping, take a look at all of the details. The repayment terms and times; the ‘fine print’ where hidden fees are usually put; the interest rates of each company and the full amount at the end of the loan.

Author: Sarah Conner

Article Source: http://EzineArticles.com/?expert=Sarah_Conner

Topics: What is a Secured Debt Consolidation Loan | No Comments »