Lower Monthly Credit
Card Payments By Refinancing or Taking out a Second Loan - Consolidate
Credit Cards into an Equity Line Of Credit
March 9th 2006
Cash When you
Now that credit card companies are forced to double their minimum
payments, many who relied on the funds for medical emergencies or
business may find themselves in a financial bind. New bankruptcy laws
may make it more difficult to shake this debt as well. Taking a second
on your house or refinancing may become more appealing.
Many financial gurus say this is a bad idea because you are taking
unsecured loans and turning them into secured loans with your house as
collateral. But if you truly intend on paying off the loans, it might
make since, especially if interest rates go higher. In fact it might be
the right time to consider consolidating your debt or taking out a line
of credit, whether you use it or not.
You may want to begin saving the special loan offers that come in the
mail and when you are ready to look into it, compare the offers. You
may not want to wait until you are backed into a corner before you
decide to take out an equity line of credit. The banks may not want to
take a risk if you wait are financially strapped.
Lenders may require a small yearly fee. We have seen fees range between
$50 and $150 by various lenders. But if you are able to lower the
monthly payments, lock in a low interest rate and extend the life of the
loan, the $50 fee may be incidental.
Some lenders will offer homeowners with enough equity a stated loan.
This is a loan where the borrower is not required to show income
documentation. These loans are popular with business owners because
many of their expenses are written off, or they may be in the process of
developing their business. They may not have much income in these early
You may want to pay the loan off early when you are making more money.
Ask if the new loan has a pre-payment penalty. Some lenders will
require a small prepayment penalty, especially in the first few years of
the contract. This is not unusual.
Read over the
offers carefully. Make a list of questions to ask while you are on the
phone with the agent, and take notes of their answers. Donít be
afraid to ask; it
could save you heartache and lots of money in the future.
Best Syndication Staff Writer
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