Bad Credit - Consolidation

Bad Credit Consolidation
Bad Credit Debt Consolidation Home Equity Loan

There is a way to consolidate your debts into one payment and improve your credit rating.

You can pay off your credit card debts and reduce the number of payments you make by taking out a bad credit debt consolidation home equity loan. To take out such a loan you have to be a homeowner who has equity in their house. Having equity means that your house is worth more than the amount it is mortgaged for.

An equity loan is a line of credit that is backed by the equity you have in your house. Even people with bad credit can get equity loans because they are secured by the equity in the house. The difference is that bad credit home equity loans have a higher interest rate.

The debt consolidation home equity loan provides a lump sump that is used to pay off your credit cards and other debts. This means that credit record can improve because the credit card debts are listed as pays.

You will still have to pay off the equity loan, you’ll just be writing one check to the equity lender rather than several checks to different creditors. An advantage to such a loan is that you will only have one bill to pay each month instead of several. This means it’ll less likely that you’ll miss a payment.

Contact your home mortgage institution

The best place to get a bad credit home equity debt consolidation loan is with the institution that holds the mortgage on your home. Before you go online contact that the lender and see if they will give you such loan.

Don’t take the loan immediately just write down the terms they’re going to give you. Then go online and locate several other lenders and review their terms to see where you can get the best deal including the best interest rate. Once you’ve located a really good home equity loan with the interest rate you could go with that lender.

It might still be in your interest to stay with the holder of your mortgage. Once you’ve gotten an idea of the rates you can get contact the lender and tell them the rates you’re getting. There’s a good possibility they might match those rates because they want your business.

Negotiate the interest rate

Never be afraid to negotiate interest rates and terms with a lenders. Lenders want your business and they might be willing to work with you. Especially if you are a good customer with a record of paying off loans.

The sooner you pay off a home equity loan the better. When you pay off a home equity loan you free up the equity in your home so you can use it for other purposes. You also improve your credit record and make it easier for you to future loans.