Consolidating debt with your mortgage
If you’re facing bankruptcy, credit card debt is unsecured and typically discharged more easily than a home equity loan. Unsecured debt consolidation loans don’t require collateral, and they usually have easier approval requirements than secured debt consolidation loans.Unsecured debt consolidation loans can have income requirements as low as ,000 annually, debt-to-income ratios of up to 50 percent and minimum FICO credit scores as low as 600.While unsecured debt consolidation loans can be easier to obtain and more convenient than secured debt consolidation loans, they generally have higher interest rates, so they are more expensive to pay down than a secured debt consolidation loan.Getting a debt consolidation loan is a major financial decision and one that shouldn’t be taken lightly.
When you do a hard inquiry during the final approval process, it will be reflected on your credit report. Although debt consolidation loans are a legitimate solution for eliminating debt, some other debt consolidation options are scams.
You don’t want to create new debt that you’ll have to pay on top of your debt consolidation loan.
You will go through several steps to apply for and receive a debt consolidation loan.
For the length of the introductory period, you can make payments to reduce your balance without accruing interest. To avoid missed payments, penalties or default, you’ll need to create a budget that allows you to make payments on your debt consolidation loan.
Assess your current debt total by listing out your debts, including credit cards, student loans, car loans and any other accounts.