8. Debt Consolidation – savingandinvesting.com
Wednesday, July 21st, 2010 at
8:50 pm
Sοmе οf tһе principles behind consolidating уουr debt ехрƖаіחеԁ.
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Tagged with: Consolidating Debt • Consolidating Your Debt • Consolidation • debt • Debt consolidation • savingandinvesting.com
Filed under: Credit Card Consolidation
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@debtcc I think one has to be very very careful with debt in general – I think the point is really to avoid high interest rate credit card debt and to lower interest rates wherever possible. Everything else is very situation-specific as I am sure you know. It is a mindset as much as anything and if it is possible to lower rates without taking other risks or other negative side-effects then a def. good idea.
When getting a consolidation loan, it must be remembered that you must borrow only how much you can afford to pay back. A low interest rate may be difficult to find but it isn’t impossible. Do you think borrowing against an asset would be a good idea when you already have so many debts to repay – that you’re gonna risk losing the asset even?
Due to the recession, credit card companies are now offering bail-out programs. To see if you qualify, visit us at debt-freesolutions.blogspot.com
canadadebtconsolidationnow(.)com I noticed offers 7 more ways to immediately get out of debt for Canadians
Sigh…..
Borrowing against your home to pay your unsecured and credit card debts = FAIL. Period. This was understood as common knowledge until just recently, when the banks then sucked the equity out of everyone’s homes while bankrupting them in a million other ways. By 2011, they estimate more than half of mortgage owners will be upside down on their mortgages, meaning they owe more than the property is worth.
If you still owe money on your house. The argument is dont pay it off because you can write off the interest. Consider this:
If you make 100,000/year in salary at 25% thats 25,000 dollars. If you pay 10,000/year in interest on a mortgage and deduct it from your taxable income. Thats 90,000 on 22,500 in tax. It reduces your taxes by 2,500/year. Would you send a bank 10,000 to not send the government 2,500? If you didnt like having your house paid off, you could always get a loan.
Why would you want to get out of debt? Why did you get in debt in the first place? Ask yourself these questions. If you have no intention of destroying your credit cards after you consolidate the debt, then why bother? If youre not going to change the person in the mirror, then why would your risk your house? Dont do it. Cut spending and pay off your debts smallest to largest. Never pay a credit card before you pay your house, food, lights and transportation cost.
you skirted around the issue, not in a bad way, but you never said, “refinance your house to include all your credit card debts, car loans, childrens school” i would have like a solid example.
Thanks for the great words on the principles behind lending. The higher the risk, the higher the required rate of return! In real estate loans, the higher the LTV, the higher the rate of return required by the lender. Debt consolidation can be a great thing under the right circumstances. Here’s link to a video that talks about how the baning and credit card industries operate. Check it out… /watch?v=0bGjYAL2Jds
Many thanks