Secured debt consolidation recently was determined to be one of the top three priorities of Americans for the year 2010. This comes as no surprise with more bad news that arrives on a seemingly daily basis on everything from double-digit unemployment rates, bank failures and job losses. What you may not know, however, are the number of bankruptcies being filed. According to the U.S. Government’s Administrative Office of the Courts, calendar year 2008 had an increase of 43% of Chapter 7 bankruptcies. Further, business bankruptcies, including small business “mom and pop” entities increased 54%. Indeed, the numbers are alarming. So does this mean bankruptcy is rapidly becoming the only solution? Certainly not. There are other alternatives that don’t have to be so devastating to your family’s finances.
With credit card debt the single most money-draining expense in most American’s budgets, debt consolidation loans have proven to be the right solution for many. It not only provides the answer for many monthly payments, but usually a debt consolidation loan will have a far more attractive interest rate, thereby further lowering the amount of money going out each month. If you’re looking for a way to solve your financial problems versus preventing them, it may be your credit scores have already taken a significant hit. In that case, a secured debt consolidation loans plan might be your best option.
Those wishing to consolidate but require secured loans often, depending on the bottom dollar figure required to alleviate the debt, might require a refinance for his home or possibly even a second mortgage. Despite the news media’s reports of it being impossible to secure housing loans in this economy, it is possible. In fact, refinances are outpacing new home purchases or construction loans. Of course, one can expect far more scrutiny from a lender; however, provided the home’s value is significantly higher than the amount one is hoping to borrow, a satisfactory agreement is often made.
Even if you have already refinanced, provided you meet your bank or lender’s guidelines, usually after thirty six months, you may be able to refinance again. Bear in mind, however, lenders now are stipulating refinances in these situations must have strong enough credit for a more attractive interest rate. Simply put, it’s just one of the new rules in the home financing sector.
Besides credit card debt; car loans, medical bills, college loans, personal loans and other expenses are all fair game for inclusion in a secured debt consolidation loan plan. Your best first step is to do a significant amount of research so that you are educated in the process and better prepared for what to expect should this become an option you wish to pursue. Also, if you’ve recently started a new job or if you or your spouse is currently unemployed, even if your credit is strong, you may run into a few bumps in the road. Lenders, as mentioned above, are far more cautious these days. They want to ensure their investment is protected and the best way for them to do that is by ensuring job stability of its applicants.
If a refinance or second mortgage isn’t an option, you can always speak with your local bank about other ways to secure a debt consolidation loan. Your goal is to ease your financial burden, avoid bankruptcy and solidify your family’s future. Keep in mind, too, it’s always a good idea, even after you have pulled through a financial difficulty, to consider a financial education course. This will further ensure your nights are restful, your stress levels are down and you’re not so overwhelmed with what the future may hold for you and your family – regardless of what the economy’s doing.
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