Consolidating student loans and mortgages

11-Oct-2019 19:38

Generally, anything where you've incurred a debt that needs to be paid off over time - credit card bills, auto loans, medical bills, student loans, etc.

The exception would be your mortgage; if you're having trouble paying that, you need to work that out directly with your lender, perhaps through a loan modification.

Home equity loans come in two major types a standard home equity loan and a home equity line of credit (HELOC).

The standard home equity loan is the most commonly used for debt consolidation because you borrow a single lump sum of cash, whatever you need to pay off your debts, and then pay it off over a period of years at a fixed interest rate.

Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.

That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.

You can also seek to take out a personal, unsecured loan on your own or try to negotiate some sort of arrangement with your creditors. The simplest, and most straightforward way to consolidate your debts is to simply to take out a new loan from your bank or credit union and use that to pay off the various bills you may have.

You're then left with one monthly bill to pay rather than several.

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Another option would be to obtain a cash advance through one of your credit cards.

However, you might be able to use a cash-out refinance to roll your other debts into your mortgage payment, as described below.

What you can't roll into a consolidation loan are ongoing bills and debts - the type where you incur new charges every month, such as gas, electric, cable TV, Internet, phone service, rent and the like.

Consolidating debt with a home equity loan could be a good option. You may have high interest credit cards, loans and mortgages. This is the practice of rolling all your debts into a single, monthly bill.

2014)When monthly bills get out of hand, debtors frequently look to debt consolidation.

First, you may be able to get a lower interest rate on your consolidation loan than you were paying on your various other debts.