Debt Relief From Debt
by: Jakob Jelling
If you are up to your neck in debt, there may seem like there is no
relief in sight. In fact this is not necessarily the truth. There are ways
to take all of your stifling bills and roll them up into one neat package
by using debt consolidation in two very popular forms Home Equity Loans,
Refinancing Loans, and a Consolidation Credit Card. All of these
instruments provide the debtor with one thing “relief” from the current
debt by shrinking it down to a single manageable debt.
Using home equity to consolidate debts
One of the popular methods of debt consolidation today is the Home
Equity Loan. What happens is that the debt is extinguished using the
equity from a homeowner’s home. A loan is created outside of the mortgage
in order to satisfy the debts. Should the homeowner default on the loan,
their house is in jeopardy of being foreclosed upon if that loan is not
satisfied with a specified amount of time.
People often consume the debt by rolling it into a new mortgage. This
way the house costs more money to the borrower, but the debt is
extinguished at close and the debt is neatly rolled away into the mortgage
securely. Upon settlement of the loan, the debts are paid in full and
satisfied. The clock on the mortgage is reset to day one.
Credit card consolidation
A low interest credit card is offered to the borrower to include any
outstanding credit and loan balances. The interest rate is a low fixed
rate for a period of up to one year, upon the year’s end it will resume at
its normal rate. Upon acceptance and terms the account should be closed
once paid in full and payments be made directly to the new credit card
provider. Some people have been able to master paying off one credit card
with another to keep the debt revolving and interest rates low. Some
people fail to close out the previous creditors account and run them back
up again as well.
All three of these options provide solid relief for the debt and help
them reconstruct and manage their debt better.
By Jakob Jelling