Millions of Americans are struggling today due to overwhelming debt.
This struggle entails trying to keep up with 20 or more different payments every month. Consolidating and downsizing their debt into installment loans could be the answer that they are looking for to regain financial peace in their lives.
Most people think that if they keep paying what they can afford, the debts will eventually be paid off. Due to tremendous interest rates, sometimes this is not the case and therefore, the need to find another avenue arises. If you only pay partial payments, or skip payments, the debts do not get paid down, and they may increase. What is truly needed at this point is a way to downsize your debt into installment loans. By doing so, you will only have one payment to budget in to your finances, and this payment is commonly more efficient with a noticeable impact on the value of your debt.
Personal Unsecured Installment Loan
Many companies are willing to lend funds as long as you have decent credit. For borrowers that do have the credit to be approved, it would be an excellent choice to consolidate debts into one monthly payment via an installment loan. The terms are usually around 72 months and the rates are normally fixed, so they will not change during the life of the loan.
Mortgage Equity Line of Credit
Banks and mortgage lenders are more than eager to loan money against your home. Equity loans have become an extremely profitable consumer loan in the lending industry.
Using equity from your house in order to downsize your debt does pose some risk as your home is the acting collateral. If this is the route that you choose, be cautious that you do not get behind in payments.
First, you should know that there are two different types of home equity loans:
* Home-equity lines of credit - Lines of credit are similar to credit cards. It has a credit limit that you can use to downsize your debt and pay down the debt monthly. These loans generally trend with the prime rate and have variable rates.
* Home-equity loans - These loans, like an auto loan, are installment loans. A certain amount of money is borrowed and there is a set schedule of when it has to be paid back. These installment loans normally have fixed rates and payments.
Another aspect to consider is that you should always have 20% equity available or you will incur a higher interest rate.
Another type of installment loan is called a consolidation loan. The biggest appeal with consolidation loans is the convenience factor of having only one payment a month. You may also downsize your debt with an installment loan as this is commonly an opportune time renegotiating interest rates. In addition, once you embark on this path. the interest is fixed, so you don't have to worry about the payment amount fluctuating. Most consolidation companies have online options available and a fast approval.
Cash or CD Secured Installment Loans
Some banks offer an installment loan that you may use to downsize your debt. These types of installment loans are secured by cash or CDs as a means of collateral. They have specific time periods and fixed rates so you may put all of your loans into a single installment loan to downsize your debt. The CD will continue earning interest while you are paying off the loan, so it is a solid win-win situation.
Check around for installment loans online, they may have the perfect solution. Rather than trying to keep up with all of those different due dates and amounts, you can be paying one simple payment each month.