How does Debt Consolidation work?
Date: Fri, 12/21/2007 - 09:41
There are two types of debt consolidation. A dmp is one form of
There are two types of debt consolidation. A dmp is one form of debt consolidation in that you make the monthly payment to the company that is handling your DMP, and they disburse the funds to your creditors.
The other type of debt consolidation is if you take out a debt consolidation loan. You'd use the money you got from the loan to pay off the debts you wanted to consolidate, and then you'd just have to make payments on the loan each month. Some people choose to use the equity in their home to do this, and many financial institutions (i.e., banks, credit unions, finance companies) offer debt consolidation loans.
Can you get a Loan with out haveing your house involved. I don'
Can you get a Loan with out haveing your house involved. I don't have the equity yet?
It all depends on how good your credit is and how much debt you
It all depends on how good your credit is and how much debt you already have. A couple of years ago, I was able to get a personal line of credit loan with Beneficial, and this was unsecured, not tied into my house in any way.
If your credit is not good, and your debt to income ratio not good either, this is going to make it difficult. If you do find someone willing to lend to you, the interest rate might be pretty steep.