If you are like most people, you have more than one debt. You probably have a few high interest rate credit cards, a car loan, a mortgage and a line of credit. If you are feeling overwhelmed with debt, you might want to think about debt consolidation. One of the easiest ways to pay off debt is to take out a home equity loan (assuming you own a home). With this type of loan you can consolidate each of your high interest credit card debts and other loans into one, affordable monthly payment with a low interest rate. Your property is used as security against the loan. You still own your home, but should you not be able to pay the loan debt, you lose your home. This means that you must stay on track and make every single consolidation payment on time. Get rid of all but one of your credit cards, and keep the balance of that card at a minimum. Otherwise, you might find yourself back in debt and without a home. . If you do stay on track and make your monthly payments that are benefits other tan one low monthly payment. Your equity debt consolidation may also be tax deductible. If you add to your first mortgage with a debt consolidation loan, the total cant exceed 100% of the appraised value of your property in order for the interest you pay to be deductible. Speak to your accountant to make sure that your interest can be deducted. |
