Home Equity Loans
Sometimes the only way people can get out from under debt is to consolidate. There are many different ways to consolidate your bills, but probably one of the best ways is to get a home equity loan. If you are a homeowner then this is the one for you.
They’re inexpensive, relatively easy to obtain and they may offer a tax deduction for the interest portion of the loan. The downside is that the collateral for the loan is the house. “A home equity loan can be an extremely useful strategy if it’s used properly,” Pahl says, “but people need to have their eyes open and understand the implications.”
The other disadvantage is the low-pressure repayment terms. “Most lenders aren’t in a hurry for you to pay it back. The leisurely repayment schedule isn’t part of your goal,” he says. “Your new monthly payment should be at least as large as your previous monthly payments, if you want to really make progress. If you can pay more, you should, because you’ll pay it off faster.”