Mortgage Refinance Debt Consolidation Loans for People With Bad Credit

More and more Americans are finding themselves in debt situations that seem overwhelming. The minimum monthly payments on student loans, car loans and credit card bills seems to accomplish nothing. The balance on debts often remain the same after interest fees are assessed.

This is why, the FTC advises consumers with large amounts of credit card debts and miscellaneous debt to investigate debt consolidation services.

Debt consolidation can be a life saver, if you do it the right way. The most important aspect of debt consolidation is to remember that your debt level is still the same BUT your debt payment and repayment period will become manageable and less stressful. This will inturn help to re-establish your credit history.

If you have bad credit and you are a homeowner, you can consolidate your debts by taking a cash out refinance loan. You can get multiple quotes from lenders, who service bad credit refinance loans. A cash out refinance loan works like this. Let's say you own a house with an appraised value of $250,000 but you only owe $200,000 on the mortgage loan. You can take out up to $50,000 cash on your home. You can use the $50,000 to pay off your car loan, student loan, home improvement bills and credit card bills. In essense you are replacing 4,5 or 6 creditors with one creditor - your mortgage loan lender.

Here are a few tips on finding debt consolidation loans:

  • 1. Get multiple quotes from mortgage refinance debt consolidation lenders.
  • 2. Get the lowest interest rate you can find. The lower your interest rate, the faster you will pay off the principal balance on your loan.
  • 3. Don't opt for too long of a repayment period. This just adds more interest to your principal balance.
  • 4. Read the terms of your loan very careful to make sure you understand contract stipulations such as prepayment penalties.