3 Things You Didn’t Know About Debt Consolidation Loans
If you have a lot of monthly loan payments and high amounts of outstanding debt, consolidating them into one monthly payment can be a great way to lower your monthly payments, reduce your interest rates, and pay off your debt faster. Here are three important things to know about debt consolidation loans.
1. You Can Consolidate Debt with a Debt Consolidation Loan
Debt consolidation loans are offered by banks, credit unions, and other financial institutions and offer borrowers a way to combine all of their outstanding debts into one monthly payment. By consolidating your debt, you'll often pay a lower interest rate than you would by paying off each debt individually (banks typically charge interest rates of 7 to 12 percent on debt consolidation loans).
2. You Can Consolidate Debt with a Second Mortgage
Most banks offer home equity loans and home equity lines of credit (HELOCs). These products use the equity in the portion of your home that you own as collateral against the loan. This will leave you with two mortgages: your first mortgage, and your home equity loan or HELOC, which can be used as your debt consolidation loan. Their flexibility and low interest rates make second mortgages a great solution for homeowners who have a lot of equity built up in their home and are considering debt consolidation loans Edmonton.
3. You Still Need to Meet Minimum Credit Requirements
In order to qualify for a debt consolidation loan, you'll need to meet lenders' minimum borrowing requirements. If your revolving debt payments are too high, you have poor credit, or you don't earn enough income, then you may still be able to qualify for a debt consolidation loan with the help of a co-signer or by offering some kind of collateral for the loan (i.e. a car, boat, or other asset).
Free Debt Consolidation Advice
Still have questions about debt consolidation loans? Whatever your financial situation, we can help you find a solution. Contact us today at our Edmonton office to book a free, no obligation debt consolidation loan consultation.