Debt Consolidation Loans for Home Owners

Debt Consolidation Loans – What do Avoid

2009-12-29T07:37:00.000-08:00

Debt consolidation loans provide welcome relief for consumers who wish to lower their debt and lower their monthly installments.

Debt consolidation allows the borrower to take out one big loan and replace it with smaller loans and other credit cards which reduces the monthly payment and takes away the burden of having to pay many small debts.

There are 3 things to look out for when taking out a debt consolidation loan:

1. Debt Consolidation Loans - High Interest Loans

This is the big one to avoid. The whole debt consolidation idea is to reduce your debts, not increase it, so be careful to calculate what the interest on your current loans are, as well as the total monthly repayment. Make sure that your new loan’s interest and monthly installments are less

2. Debt Consolidation Loans – Make More Debt

Be careful to not fall into the trap of thinking that you now have so much more money left at the end of the month that you spend it, or worse, run up the credit cards again. This would mean that you have a big loan and that you’re adding even more debt again. Rather use half money that you’ll be saving and pay that towards the new loan to pay it off quicker.

3. Debt Consolidation Loans – Debt Counselors or Debt Administrators

Don’t be duped into going into debt counseling or administration by dubious people that misrepresent administration or debt counseling as a debt consolidation loans. It’s difficult to get out of it and will leave a black mark on your name.

The best advice to follow is to always read everything clearly and make sure you know what you are signing for and know what you will be paying.

For more on secured debt consolidation loans, please visit our website on http://www.globalproperty.co.za

When Should You Use Debt Consolidation?

2009-11-22T22:51:00.000-08:00

If you have a heap of debt keeping you awake at night, it is in your best interest to find relief as quickly as possible. Financial problems are overwhelming millions of people today and are leading to separation and divorce of families and a lot of health problems due to overwhelming stress.

If you find yourself overwhelmed by debt but don't want any of those outcomes, it is time to weigh all of your options for debt relief.

Debt Consolidation - The First Step

If you have not done so already, the first step in managing debt is to take an honest look at what you are really dealing with. This means taking inventory of the exact amount of income you have coming in and then honestly taking inventory of all expenses going out.

This is often a difficult process, especially if you have recently taken a pay cut. Do not be surprised to find that you are spending far more money than you actually have coming in or if your total debt is larger than you realized.

Debt Consolidation - Sacrificing for Your Future

The next step is to start making cuts to your expenditure wherever possible. This may include reducing the amount of money spent on shopping and entertainment, eating at home on a budget rather than eating out, and finding cheaper rates for insurance policies.

That may be enough to get on top of your bills somewhat and make things more comfortable, but if you have skyrocketing interest rates on credit cards and other debts you may still struggle to get out of debt.

Debt Consolidation vs. Bankruptcy

When simply cutting back on expenses does not help, the choice often comes down to debt consolidation or bankruptcy. You should always see a debt counsellor before even considering bankruptcy, since a consolidation is much less harmful to your credit score than a bankruptcy.

If you see a non-profit debt counsellor first you are losing nothing even if you do opt for bankruptcy later on.

A debt counsellor will work with your lenders to significantly reduce the interest rates and/or amount owed so that the problem is easier to handle.

You may then be able to make the payments under these new agreements, or you may move forward and apply for a consolidation loan that will combine all of those debts into a single debt.

Debt consolidation does not free you from debt like a bankruptcy, but it allows you to make more reasonable payments to get yourself out of the debt eventually. It doesn't hit your credit score as hard and cripple you in the future like a bankruptcy, either.

Debt Consoliation - Final Step

Once you have gone through the necessary steps with your debt counsellor and new agreements have been arranged with most or all of your lenders, it is time to make the final decision.

If you think you can make the payments with the new agreements struck with your lenders, then you may want to establish a very tight budget with the income you are now well aware of and try to make it out of debt on your own.

If on the other hand you still find the payments difficult to make and you feel it is very unlikely you will ever pay off the debts at the new interest rates, you may be a prime candidate to apply for a debt consolidation loan.

How Much Debt is Too Much?

2009-11-04T20:51:00.000-08:00

Consolidate Debt: While some people would like for there to be a magic number for the answer, the truth is that there isn't. The amount of money that is too much for one person or one household is not always going to be too much for another person. There is just not a straight answer that goes across the board.

Read Further...

Reasons Why You Should Take On a Debt Consolidation Loan

2009-10-26T09:13:00.000-07:00

Many people have been told that a debt consolidation loan is the worst thing that they can do because it affects their credit score.

While there is some truth to the credit score thing, it is nowhere near as much damage as continuing to make late payment after late payment.

Even if you are making your payments on time, if your debt to income ratio does not look all that good, your credit score is being affected.

All it would take is one unexpected expense to come up and you would be in trouble.

Another thing to consider is that future lenders do not look just at the credit score as they also look at your individual debts and what they are. For example, unpaid medical bills really do not affect you as unpaid credit cards do.

If a lender looks at your credit report and notices that you took on a debt consolidation loan, they will view it more as you did a responsible thing rather than thinking that you are not a good applicant.

In the end, all of the lenders got paid so it is not like anyone was left out of their money. This is something that they will think about.

So how do you know whether or not you should take on a debt consolidation loan? The best thing to do would be to look at your expenses. Look just not at your monthly bills but the whole picture.

Take a look at how much you are actually reducing your debt each month when you make your payments. Are you really making all that much of a dent in your debt? If not then you are simply making monthly payments to a company in order to continue to be allowed to owe them money. This is not a good thing.

In addition, can you afford the little extras in life that make the days just a little more enjoyable? Can you afford to rent a movie, order pizza on a Friday night or simply spend a little extra gasoline money to take a drive through the countryside?

If not, then you are over extended and you really should look into your loan consolidation options. When you take out a loan for the consolidation of your bills, you will be surprised at how much extra money you will have each month.

Just think of all of the wonderful things you can accomplish with the extra money each month. Many people have found that they have anywhere from one hundred to eight hundred extra dollars each month.

This is a lot of money that can be placed back on your debt to wipe it out faster or you can put all of the extra money into a savings account. Then again, maybe you can finally take your family on a dream vacation.

So step back and take an objective look at your finances. Would you advise someone else in the same situation to take out a debt consolidation loan? If so, then what are you waiting for?

For more information on debt consolidation or for a debt consolidation loan don't hesitate to contact us

Reserve Bank Reduces the Interest Rate

2009-08-13T06:32:00.000-07:00

Today the South African Reserve Bank decided to cut it's lending rate by 50 basis points, or a half a %.

This is excellent news for heavily indebted South Africans struggling to service their monthly bills, including credit cards, personal loans and mortgages.

Now is the ideal time to consolidate your higher interest debt into your bond. For more information about debt consolidation, please visit our site on: http://www.globalproperty.co.za

Consolidating Bills for Improved Financial Life

2009-07-31T07:23:00.000-07:00

Consolidating bills is without of doubt something that has increased in popularity tremendously the past couple of months. The financial climate is making it more and more difficult for consumers to handle their financial responsibilities at the end of each month.

But what does it actually mean to consolidate your bills? What options do you have? Is it the best solution for you?

What does it mean?

Consolidating your bills into one means that you take out one larger loan, such as an extension on your home loan, and use this additional amount to settle your other debt. The result would be only one, larger payment at the end of each month.

What options do you have?

Well, if you are a home owner, with equity in your property, the best option would be to take out a further bond on your home loan to consolidate your other debt. Your home loan is the "cheapest" kind of debt that you can have, since this will give you a better interest rate and a longer loan term than most other loans. This will result in a lower monthly installment which leads to a better cash flow.

If you are not a home-owner, you can look at a larger personal loan. Often you can be approved on a better interest rate and longer term if the loan amount is larger. So one personal loan that is sufficient to cover all your other is likely to result in better loan terms and lower repayments, than if you compare to what you are currently paying.

Is consolidation the best option for you?

This is a very individual question, and easier to answer if you can use your home loan to consolidate. If you can use your property as surety for the loan, and you compare the new installment to what you are currently paying on various other debt, you will likely see an enormous increased cash flow.

This means you will be able to use cash for your daily life, and not more credit.

You will also be able to pay off your debt sooner, and live a debt free life.

If you are not a home owner, and must look at a personal loan, make sure your repayments will go down sufficiently to increase your cash flow enough for you to feel the difference.

The best advice available is to have a thorough, honest look at your finances. What do you spend on what? Include both your debt payments and your monthly, running costs.

Compare to what your situation will be if you consolidate your bills. There are many professionals that are available to help you with these types of questions. You can never get more than a no, so see what they can offer you.

For more information on consolidating bills or debt consolidation please visit our website on http://www.globalproperty.co.za

Use the Correct Method When You Consolidate Your Debt

2009-06-08T04:25:00.000-07:00

No matter what the reason is that you are in looking for help to consolidate your debt, it is a very stressful situation. You might have lost your job, gone through an expensive divorce, become disabled due to an accident, or incurred credit beyond your financial means. To make it all worse, many believe that the only way out is to file for personal bankruptcy.

The optimal way to consolidate your debt is by using equity in your property. When comparing the repayments on a mortgage, with other, short term debt, you will easily see why.

Since mortgage is a secured loan, with your property as security, you will benefit by being able to pay it off over a longer term. And the interest the bank will charge you will be much more beneficial. But, generally you need to have a good credit history to be able to qualify for a second bond.

So, if you are not a home owner, or if you don’t have a good credit history, what can you do?

Granted, sometimes bankruptcy is the only answer, but should be avoided as far as it is possible. It will reflect on your credit record for up to ten years, and can cause additional problems at a later stage.

Others will go to a debt counselor, or choose debt administration to tackle their debt problem. This can be a dragged out procedure, and in the end rather costly. Making use of a debt counselors help means you will go through your budget with him or her. After calculating how much you can actually afford to pay back every month, this amount will be divided into installments to all your creditors.

This means you will make smaller repayments, over a longer period of time. This can sometimes drag out, as the repayments are much less. Also, the debt counselor will charge for their service throughout. This means that the full amount that you pay to the debt counselor monthly will not be used to pay off your debt. The debt counsellor will keep a portion of it for their expenses.

The positive aspect of debt counseling is that your creditors can not take legal action against you, while you are under debt counseling. The downside is that you will not have access to any credit during this period.

Unfortunately there are always individuals who will take advantage of others that are struggling. So if you decide to make use of a debt counsellor’s services, learn your rights first. Also, find out exactly how the will go about it, and what the fees involved are. A little bit of research can prevent a headache at the end.

If you are a home owner, and want to apply for a debt consolidation loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the debt consolidation loan is for you.

Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.

Why Apply For a Second Mortgage Loan to Ease Your Financial Burden?

2009-06-02T02:30:00.000-07:00

The individuals that have a property with equity in have an advantage when looking at consolidating debt. They have the option of applying for a second mortgage loan to solve their dwindling cash flow.

What is equity?

Equity is the positive difference between the market value of your property, and the outstanding bond. So if you owe less than the value of the property you have equity in your property. After you have bought a property, the normal course is that the value will increase, and your bond will decrease as you pay it off.

This will increase your equity. When the equity has increased sufficiently, you can apply for a second mortgage loan. This would mean you are applying for a home loan on an existing property, and thereby accessing the equity in your property.

Why apply for a second mortgage loan?

If you, like many others, are looking for a way to consolidate your debt, or just access additional funds, this is a good option. Since your mortgage is the “cheapest” kind of debt that you can have, you will be able to increase your cash flow tremendously. If you compare the lower interest rate and longer terms that a home loan can offer, with credit cards, personal loans or other high-interest debt you might be surprised to see the difference.

If debt consolidation is your goal, a good advice is to invest some of the additional cash you have available into your home loan. This will help you pay off your mortgage quicker, and will increase your equity again.

Since applying for a second mortgage can a daunting task, you can make use of a professional mortgage originator to assist you during this process. This will take a lot of pressure off your shoulders, and you can rest assured you will be in good hands.

People that Refinance Homes for Debt Consolidation

2009-05-24T23:32:00.000-07:00

Have you wondered how it works when people refinance homes to do debt consolidation.

Refinancing your home loan to consolidate your debt is not a new thing, but people have only recently started realizing the benefits and that's why it has now become a popular thing to do.

How does it work?

Well firstly you need to have equity in your property, that means that your property must be worth more than you currently owe. That difference should also not be more than 80% Loan to value (LTV) which means, if the property is worth R1 000 000 and you owe R900 000 the LTV is 90%, then you can't apply.

The banks have put a restriction on the amount you are allowed to owe in relation to the value of the property. That amount differs from bank to bank, but is generally between 80-90%.

I have enough equity, does it guarantee my refinance home loan?

No, unfortunately not. You also have to qualify on your income and affordability. Generally you are allowed to use 30% of your joint gross monthly income for a bond repayment, but after your salary deductions and monthly expenses are deducted you must still be able to afford the bond repayment.

Isn't it expensive to use your home loan to refinance?

It is expensive if you use the bond to pay off your car or credit cards and just continue to pay the minimum bond installment over the term of the bond which is normally 20-30 years. I suggest that you use the monthly saving on the debts you've paid off to pay an additional amount into your bond. Not only will you save on interest, but you will pay your bond off much sooner and not pay back your debts over 20 years.

I hope that this short article helps you to understand why people refinance homes for debt consolidation and how it can benefit you.

To find out more about how refinance homes loans can help you, go to www.debtconsolidation-loan.co.za

Consolidate Accounts – Save Thousands

2009-05-22T04:36:00.000-07:00

The latest buzz word is “debt consolidation”. What does this mean? Does it really help? What are the benefits to consolidate accounts into one larger account?

Benefit 1

When you have several accounts to pay every month, you have just as many due dates and different amounts to keep track of. This makes it more difficult to plan your budget. Since you don’t pay everything the same date, you will have money in your account that you can’t use, since they must be used to be back debt. This means you have money in your account that is not actually yours.

After you have consolidated your accounts in to one account, you only have to worry about one due date, one minimum payment, and what is left in your account is yours to spend as you please.

Benefit 2

With multiple payments come multiple bank charges. Save on bank charges by only having one account to pay at the end of the month.

Benefit 3

With only one monthly payment, it will be easier for you to draw up a comprehensive budget. With more control, you will be able to control your finances better, and it will be easier for you to pay off your debt quicker.

Benefit 4

When consolidating unsecured debt into a secured loan (mortgage) you will benefit from more beneficial interest rates. This means lower monthly repayments. The result will be a better cash flow. If handled correctly, you can use your additional cash to invest into your mortgage, shorten the term with a couple of years, and save thousands.

If you are a home owner, and want to apply for a debt consolidation loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the debt consolidation loan is for you.

Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain. Go to: www.debtconsolidation-loan.co.za

Debt Consolidators – What Can They Offer?

2009-05-19T03:55:00.000-07:00

When finding themselves in a situation where it is difficult to service all financial commitments, many will turn to a debt consolidator for assistance.

A debt consolidation consultant will help you consolidate all your existing debt into one account. There are many benefits to this, including having only one monthly payment, instead of several. This will give you more control over your finances, and easier to pay off sooner.

Many debt consolidation consultants will use a client’s mortgage as the main tool to consolidate debt. Since a mortgage is the “cheapest” kind of debt available, it is the recommended method. It provides a longer repayment term, and a lower interest rate, as it is a secured loan. This means it will be easier for the client to meet the minimum payments.

Some debt consolidation consultants will make use of unsecured loans to assist with consolidation. Even though these are more expensive than a home loan, they could offer the relief a non-home owner is looking for.

When choosing a debt consolidator it is important to remember that they are performing a service that is in place to help you to get into a better financial situation. You need to be comfortable with what they are offering you, and be sure that you will be in a better financial situation after the consolidation.

Some debt administrators will wrongly call themselves debt consolidation consultants. Since debt administration includes legal costs, debt collection costs, and debt collector’s fees as well as a different procedure, this is very misleading. As the client, you need to make sure what service it is you are asking for.