Debt Elimination LoanCredit Cards and LoansDebt elimination loan...this is really just another word for a second mortgage. Once upon a time it was not too hard to find a lender who would give you one big unsecured loan to pay off all of your credit cards. Alas, too many of these loans went under and this type of lending completely disappeared. These days the only way to get a loan like this is to secure it with something valuable - usually a mortgage on your house. Today you would be wasting your time to look for a debt elimination loan that does not require a mortgage. If you do have a home and there is some equity built up in it from making payments for a long time or from increasing property values in your area, then you are all set. You can likely get a second mortgage on your property at a much better interest rate than you are currently paying on your existing debts. The only real danger of getting a debt elimination loan is that the sense of freedom and wealth that it brings will often encourage new spending - landing you right back in the soup you just got out of...without any new equity to solve the problem. We strongly recommend that if you use a debt elimination loan (i.e. second mortgage or refinance loan) that you immediately cancel all but one of your credit cards and put yourself on a firm budget. Start saving money each month and keep it in a separate savings account. Occasionally reward yourself for your newfound financial restraint by moving a small amount of cash from your savings to your checking and buying yourself a small frivolous purchase. A debt elimination loan is a great way to "start over" financially, but only when taken together with firm new financial policy to avoid getting back in debt.
|
