Consolidating debt home equity
Your monthly payment on the first loan is 7, and the payment on the second is 3. You consult a company that promises to lower your payment to 0 per month and your interest rate to 9% by negotiating with your creditors and rolling the two loans together into one. Who wouldn’t want to pay 0 less per month in payments?
If that’s not bad enough, you’ll end up shelling out ,080 to pay off the new loan versus ,392 for the original loans—even with the lower interest rate of 9%.
Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission.
Even with a vehicle loan, all they can legally take is the vehicle. So if you're thinking about taking out a home equity loan to pay off your consumer debt, let me be clear if I haven't already-DON'T DO IT!!! Learn to change your habits when it comes to credit cards and debt.
Do you really want to put your home at risk if you run into problems and can't pay? Make a written plan to pay off your debt that doesn't involve putting your house on the line. Behavior change is the only fix that can work permanently without putting you at great risk.
That may ding your credit score for awhile (big woop, you don't need a credit score anyway), but it's better than having your house taken away from you.
Credit cards and medical debt are unsecured debt, which means they can't seize any of your property if you can't pay.